REVENUE DEBT & BANKRUPTCY
The Revenue believes owners of luxury homes who cannot pay their debts should be forced to sell off their large piles and move to more ‘modest’ homes, The Sunday Business Post reports.
It is “not appropriate” to automatically exclude any asset, including the family home, from the terms of a debt settlement, according to the Revenue. In a submission to the Law Reform Commission, Revenue said it was reasonable to expect people to dispose of “a luxurious or high-value residence and to acquire a residence of more modest proportions in order to meet some or all of their debts”.
In a document the newspaper obtained by way of a Freedom of Information request, it also discovered the Revenue believes a bankruptcy should be discharged after two or three years, rather than the current 12 years.
“Revenue agrees that the legal arrangements for bankruptcy are ineffective for both creditors and debtors and are in need of comprehensive review.”
The view that reform of the current bankruptcy laws is both necessary and extremely urgent is echoed in The Sunday Tribune, which interviews a leading expert in the field, solicitor Bill Holohan.
Commenting on proposed reform of the bankruptcy process which would see the conditional discharge period halved from 12 to six years and an automatic discharge after 20 years, Holohan said it was a step in the right direction but still fell short of what was needed.
Holohan says the current government proposals to discharge bankruptcy automatically after 20 years is welcome in principal but is still too long. Bankruptcy, he said, “is still viewed as an ignominious form of shameful legal limbo”.
Holohan noted that although an element of fraud was present in a very small number of bankruptcy situations, the vast majority of people affected were entrepreneurs who had traded in good faith.
“The general public perception of bankruptcy in Ireland is of it as a quasi-criminal affair rather than a rehabilitation process to allow entrepreneurs to re-enter the business world, having learned the lessons of failure first time round.”
These views were echoed in The Sunday Times, where personal finance columnist Jill Kerby vented her spleen on the government’s latest attempts at reform of the bankruptcy laws.
“Our archaic, inflexible and absurdly expensive bankruptcy laws need an overhaul, not some tinkering at the edges,” she says.