Going bankrupt in Ireland versus bankrupt in the UK

With the rise of what is known as Jingle Mail (posting your house keys to a mortgage lender due to an inability to meet mortgage payments), it is sobering to consider what going bankrupt means in Ireland. A person in going bankrupt in Ireland has a completely different experience than that of a person who goes bankrupt in the UK. 

While I would not consider bankruptcy in the UK pleasant, comparing the consequences for a debtor here in Ireland and in the UK is quite startling. After some research, here is what I found:

Implications of bankruptcy in the UK
  • A bankrupt person may not obtain credit of £250 or more without disclosing his or her bankruptcy.
  • A bankrupt person may not conduct business in any name other than that in which they were made bankrupt.
  • A bankrupt person may not be involved directly in promoting, forming or managing a company without a Court’s permission.
  • A bankrupt person may not hold certain public offices.
  • A bankrupt person may open a new bank account but should disclose the fact that they are bankrupt. 
  • A bankrupt person may be freed from obligations under the bankruptcy order (discharged) after one year.

Implications of bankruptcy in the Ireland
  • The bankrupt person is required to make full disclosure of his or her property in open court. 
  • The bankrupt person has all their assets vested in the Official Assignee (Court official to whom property is transferred).
  • The bankrupt person may their salary or pension appropriated for the benefit of their creditors by the Court.
  • The bankrupt person is not entitled to operate a bank account.
  • The bankrupt person cannot act as a director or actively take part in the management of a company.
  • The bankrupt person cannot be a member of the Dáil or Seanad, be a county councillor or member of a local authority.
  • The bankrupt person is not discharged from the bankruptcy for 12 years (to secure an earlier discharge, creditors must receive 50 per cent of what they are due). 

With such draconian bankruptcy laws, it is understandable why some are calling for reform of the law around bankruptcy. 

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