It is indeed an ill wind that blows nobody any good. A proposed reform of the bankruptcy laws to bring them into line with Britain could mean good business if an expected 4,000 people a year declare themselves personally insolvent in Ireland, according to The Sunday Business Post.
IrishBankruptcyUK – a new firm set up to help Irish people declare bankruptcy in Britain – says it is receiving around 20 inquiries a week. An Irish person can be declared bankrupt in the UK provided they move there and can prove to the British courts that they have “established their centre of main interests” in the country.
The advantages are clear from the bankrupt’s perspective. Although new rules introduced earlier this month in Ireland reduced the period for applying for a discharge from bankruptcy from 12 years to five, in Britain the process takes only one year.
Steve Thatcher, a spokesman for the company in the UK, said Irish people had to overcome the stigma of personal insolvency.
“The laws used to be similarly archaic in the UK until we adopted the American approach that bankruptcy is often unavoidable,” he said. “In some sectors, such as IT, many tech entrepreneurs have been bankrupt more than once and bankruptcy is not seen as a barrier to success.”
Many of the company’s Irish clients had foundered because of the property downturn.
“Either their own mortgages or loans relating to investment properties are in negative equity,” he said. “While bankruptcy cases in Britain have dropped by almost a third, in Northern Ireland they have increased by 43%. Most of this increase can be attributed to people from the Republic, which is no surprise as it is very easy to do.”
And as if to reinforce the point about stigma, the newspaper notes IrishBankruptcyUK is owned by three Irish businessmen, who declined to be named, citing the sensitive nature of their business.