A NUMBER of business groups and other bodies have welcomed as a step in the right direction the proposal to cut the bankruptcy period to five years from 12, but also have argued that further reforms are needed.
The Irish Small and Medium Enterprises Association’s chief executive Mark Fielding said the proposal was a step towards bringing the Republic’s outdated bankruptcy laws into line with those of other states, particularly the UK. There was “still a long way to go”, as the Republic’s bankruptcy laws were anti-entrepreneurial and penal.
Gail McEvoy, president of the Institute of Certified Public Accountants in Ireland, said it was ridiculous the Republic had persisted for so long with bankruptcy laws dating to the 1800s. She argued that urgent reform of the regime was needed to remove the stigma attached to business failure and to encourage risk taking.
“The process of bankruptcy in Ireland is very much out of date in comparison with our European partners, in particular the UK, and as such the range of bankruptcy alternatives is both limited and unwieldy,” she said.
Ian Talbot, chief executive of Chambers Ireland, the umbrella body for the Republic’s chambers of commerce, said the proposed change was a positive development.
However, he urged that the Government introduce legislation implementing the Law Reform Commission's Report on Personal Debt Management and Debt Enforcement,which allows for automatic discharge from bankruptcy after three years.
The Free Legal Advice Centres said the proposal was a small step forward in aiding people who were seriously over-indebted.
Director general Noeline Blackwell said it was only one piece of the jigsaw.
“There needs to be a much wider debt settlement scheme put in place which does not just benefit those who have been wealthy and can afford to use the bankruptcy procedures,” she said.
This should include a non-judicial approach to debt settlement.
