Last year marked one of the busiest years for the Insolvency Service of Ireland due to the large number of cases they examined in relation to bankruptcy. With at least 210 cases seeming somewhat suspicious, this independent statutory body had to dig deeply into financial and asset related records of every bankrupt person.
In order to be eligible for bankruptcy declaration in Ireland, you must fulfill three main requirements. The first one is that your debts must exceed your assets by €20,000. Assets are both financial and physical; some examples include stocks, pension funds, receivables, homes, cars, exc.
Many of the issues that the Insolvency Service of Ireland has seen in relation to this part of bankruptcy declaration is that many people who are declaring bankruptcy are attempting to keep some of the assets that are most important to them by illegally transferring the ownership to a family member or close friend.
The asset cannot be leveraged by the bankrupter in the repayment of loans if it is not under their name, which is why this it is now being closely investigated. If this asset were of great value, then this first requirement may not have even be met.
The second requirement for declaration is that the debtor must be insolvent, meaning that they are not making enough money or do not have assets with enough value to be able to pay the debts that they owe to lenders.
Lastly, before declaring bankruptcy you must have attempted to resolve your debt through personal insolvency. Personal insolvency is a plan for people who can afford to pay some but not all of their debt payments each month. This takes into account monthly household spending and what is left over once that aspect is removed from income.
If you can fulfill all of these requirements, you are then able to submit an application to the High Court. If you are approved, all of your debts are written off, all assets that are not necessary to survival are transferred to the Official Assignee and you may make payments up to 3 years after you have declared your financial situation. After one year you are discharged from bankruptcy, but this has severe effects on your ability to get any type of loan in the future and could hinder your future plans.
When people declare bankruptcy it is only because they are drowning in debt, or is supposed to be that anyways. Through a few investigations, the ISI has found over €3.8 million in hidden assets with more still certainly uncovered. 2018 had over €11 billion in hidden assets rediscovered by this agency.
Overall, the amount of people that have declared bankruptcy is down from last year, but there are still a great deal of people attempting to abuse the system.