Personal Insolvency Bill

On 24 January, 2012, the Government approved the Minister for Justice and Equality proposals for the drafting of the Personal Insolvency Bill. The drafting of the Bill, will be arranged on a priority basis, so that it can be published by end of April - in line with the revised commitment in the EU/IMF Programme of Financial Support for Ireland. The drafting of the Bill will be subject to ongoing consultation with relevant Departments and the Attorney General. The Heads of the Bill which the Government approved today will, of course, be subject to further refinement during the formal drafting stages in advance of publication.

The Minister will forward the General Scheme of the Bill to the Joint Oireachtas Committee for Justice, Defence and Equality for their consideration, in line with the commitment in the Government Legislation Programme for the Autumn Session. The Minister also invites comments on the General Scheme of the Bill from any interested party.

The proposals for the reform of personal insolvency law will involve the introduction of the following new non-judicial debt settlement systems, subject to relevant conditions in each case:

· A Debt Relief Certificate to allow for the full write-off of qualifying unsecured debt up to €20,000, after a one-year moratorium period;

· a Debt Settlement Arrangement for the agreed settlement of unsecured debt of €20,001 and over;

· a Personal Insolvency Arrangement for the agreed settlement of both secured and unsecured debt of €20,001 and over.

The proposed legislation will also continue the reform of the Bankruptcy Act 1988, begun in the Civil Law (Miscellaneous Provisions) Act 2011. This will include, critically, the introduction of automatic discharge from bankruptcy, subject to certain conditions, after 3 years in place of the current 12 years.

Link - Scheme of the Personal Insolvency Bill