MINISTER FOR Justice Alan Shatter said very few people had been rendered bankrupt despite the “economic catastrophe” that had hit the country.

Outlining his plans to reduce the bankruptcy term from 12 to five years under the Civil Law (Miscellaneous Provisions) Bill 2011 at the Dáil justice committee yesterday, Mr Shatter said a total of 12 people were declared bankrupt last year.

“There have been in the current economic climate quite a number of small contracting firms that have had to liquidate because when major construction companies have folded, they haven’t paid their debts.” The vast majority were companies as opposed to sole traders, he added.

“There have been very few people, despite the economic catastrophe that has afflicted this country and the huge increase in unemployment, there have been very few people who have been rendered bankrupt.

“Last year 27 were rendered bankrupt.”

Sinn Féin TD for Cork North Central Jonathan O’Brien said while he appreciated that the reduction being introduced by Mr Shatter was a “big change”, he continued to believe a period of three years was more appropriate.

Mr Shatter revealed that his own original inclination had been to reduce the bankruptcy period to three years but a sense of fairness was important when the majority of people were tax-compliant and a small number “led the high life irresponsibly to the cost of others”.

He said the United Kingdom had reduced its bankruptcy term to one year, “and they have now discovered it’s a real problem and people are using that just to avoid debt”.