Frequently Asked Questions
Unfortunately many of the questions asked by people are specific to their personal circumstances and in what jurisdiction you declare bankruptcy. It is only when we review one’s individual circumstances that we can provide accurate advice. Below we have answered some of the more generic questions, however, for others advices a free initial consultation puts us in the best position to offer an opinion providing specifically tailored to your position.
Q. What is bankruptcy?
A. Bankruptcy is a legal process involving the seizure of property & assets of an individual who is unable – or unwilling – to pay their debts, the assets and property is transferred to a trustee to be sold. The proceeds of the sale are then distributed between the person’s creditors. All the individual’s debts are written off (except for some debts such as child maintenance payments etc).
Q. How long does bankruptcy last for?
A. In the Republic of Ireland anyone who is made bankrupt stays bankrupt (even after death) unless they are discharged by the court. The courts will only consider allowing an individual to leave bankruptcy after enough money has been raised through the sale of their assets to cover the costs, fees, expenses and certain priority debts that have arisen in the bankruptcy process after a 12-year elapsed period.
Q. Will others know that I have been made bankrupt?
A. Following adjudication (the court order making you bankrupt) a notice of this is published by the petitioning creditor or you (if you have made yourself bankrupt) in one national and one local newspaper. This notice will also contain information about the next statutory court sitting. A local newspaper is one which is published in the area where you live or carry on business.
Other creditors may appear at the statutory court sitting and may make a claim under the bankruptcy. Other notices are also published at various stages of the bankruptcy, such as advertising for creditors and notice of discharge of bankruptcy. A Bankruptcy Register in the Office of the Examiner of the High Court and searches can be made against this register.
Q. What practical steps am I required to do when I am made bankrupt?
A. You must co-operate fully with the Official Assignee’s office in all matters relating to your bankruptcy. Initially you must attend for interview with the Official Assignee. You must also file a Statement of Affairs in the Office of the Examiner of the High Court.
The Statement of Affairs must set out all of your financial details including assets held and all amounts owed by you. The statutory court sitting will only be passed in the High Court when your Statement of Affairs has been filed. You also have other legal obligations in connection with the administration of your estate and assets. This includes: the delivery of your accounts or papers to the Official Assignee when requested, the delivery of your title deeds to property and any other possessions to the Official Assignee, assisting the Official Assignee in the administration of your estate, and disclosing any property acquired by you since the date of your bankruptcy Order to the Official Assignee. Where you fail to co-operate with the Official Assignee, the High Court may summon you to examine you under oath.
Q. What happens when I am made bankrupt?
A. The courts are officially responsible for managing a bankruptcy proceeding. The assets of the bankrupt individual then fall under the control of a trustee. In the UK this will be the Official Receiver – a civil servant and officer of the court. Whoever is appointed becomes responsible for uncovering as much as possible about the debtor’s assets and liabilities, and maximising returns for the creditors within certain guidelines.
Q. What happens to my property when I am made bankrupt?
A. The answer to this question differs depending on your particular circumstances and in what jurisdiction you declare bankruptcy. Please feel free to meet with one of our partners in confidence, re same. All conversations are conducted on a completely confidential and discreet basis.
Q. What about property I own abroad?
A. The answer to this question differs depending on your particular circumstances and in what jurisdiction you declare bankruptcy. Please feel free to meet with one of our partners in confidence, re same. All conversations are conducted on a completely confidential and discreet basis.
Q. Can the family home be sold?
A. The answer to this question differs depending on your particular circumstances and in what jurisdiction you declare bankruptcy. Please feel free to meet with one of our partners in confidence, re same. All conversations are conducted on a completely confidential and discreet basis.
Q. What if we already have a mortgage or have borrowed against this home?
A. The answer to this question differs depending on your particular circumstances and in what jurisdiction you declare bankruptcy. Please feel free to meet with one of our partners in confidence, re same. All conversations are conducted on a completely confidential and discreet basis.
Q. I jointly own the family home with the bankrupt, what about my interest?
A. The answer to this question differs depending on your particular circumstances and in what jurisdiction you declare bankruptcy. Please feel free to meet with one of our partners in confidence, re same. All conversations are conducted on a completely confidential and discreet basis.
Q. Does it have implications for my salary and pension?
A. The answer to this question differs depending on your particular circumstances and in what jurisdiction you declare bankruptcy. Please feel free to meet with one of our partners in confidence, re same. All conversations are conducted on a completely confidential and discreet basis.
Q. Can I operate a bank account while I am bankrupt?
A. Yes, you can operate a bank account. However if you obtain credit of €650.00 or more without disclosing your bankruptcy, you are guilty of an offence.
Q. Can I apply for credit if I am declared bankrupt?
A. Yes, however you must declare yourself bankrupt when applying for credit of €650 or more, failure to do this is an offence under the Bankruptcy Act, 1988. You may also find that you are refused credit due to your credit rating being very poor.
Q. Can I still trade while I am bankrupt?
A. Yes, as long as you trade (Sole Trader) in your own name. If you trade in a name other than that in which you were made bankrupt without disclosing this name, you are guilty of an offence. You must notify the Official Assignee of any business or trade in which you engage.
Q. Can I manage a company or become a director of a company?
A. No, under the Companies Acts it is an offence for a bankrupt (until discharged from bankruptcy) to act in various capacities in relation to a company. These include director, auditor, manager, liquidator or receiver of a company.
Q. What are the consequences for a Partnership that I am involved with?
A. A partnership in which the bankrupt has been involved is dissolved by the bankruptcy, unless the terms of the partnership provide for it to continue.
Q. Can I seek employment while bankrupt?
A. Yes. You can continue in current employment or seek employment.
Q. As a bankrupt can still earn a living, what about my income?
A. The answer to this question differs depending on your particular circumstances and in what jurisdiction you declare bankruptcy. Please feel free to meet with one of our partners in confidence, re same. All conversations are conducted on a completely confidential and discreet basis.
Q. Can I travel outside the jurisdiction?
A. Yes.
Q. Are there consequences for any existing or future inheritance?
A. The answer to this question differs depending on your particular circumstances and in what jurisdiction you declare bankruptcy. Please feel free to meet with one of our partners in confidence, re same. All conversations are conducted on a completely confidential and discreet basis.
Q. Is it possible to "ring fence" my assets from creditor?
A. The answer to this question differs depending on your particular circumstances and in what jurisdiction you declare bankruptcy. Please feel free to meet with one of our partners in confidence, re same. All conversations are conducted on a completely confidential and discreet basis.
Q. Are there other consequences?
A. Yes, bankrupt persons are not entitled to hold elected representative office, in local authorities, in the Dáil or the Seanad.
Q. How Does A Creditor Make Me Bankrupt?
A. A creditor can bring a petition for bankruptcy against an individual owing them money where the debtor has committed an "act of bankruptcy" within three months beforehand.
An act of bankruptcy is an act or default on the debtor's part which makes the debtor liable to be declared bankrupt by the court. The various acts of bankruptcy are listed in Section 7 of the Bankruptcy Act, 1988, but the most common acts of bankruptcy relied upon by a creditor are:
- failure by the debtor to comply with a bankruptcy summons requesting payment, within fourteen days from service of the summons on the debtor, of a specific sum due.
- the seizure of the debtor's goods , or the making of a return of no goods in respect of the debtor, by the sheriff or county registrar.
For a creditor to be entitled to petition the court to adjudge a debtor bankrupt, a number of conditions must be met:
- as has been mentioned, the petition must be presented within three months of the act of bankruptcy;
- the debt owed must be a liquidated (i.e. quantified) sum;
- the debt owed must amount to at least €1900.00;
- the debtor must be either domiciled in the State or within a year prior to presentation of the petition have ordinarily resided, had a dwelling or place of business, or carried on business within the State:
The creditor's petition must note whether any security (e.g. mortgage or charge) is held in respect of the debt, and if so indicate whether the creditor intends to surrender the security for the benefit of the creditors or to value the security.
In either case, the petitioning creditor or debtor must advertise notice of the bankruptcy and the public sitting, and to lodge with the Official Assignee a sum of €650 towards the costs and outlays of the bankruptcy and indemnify the Assignee against the further costs and outlays which may be incurred in the proceedings.