What you need to know about Bankruptcy Applications

Sometimes the options of a DRN, DSA or PIA are not the right one for you.

Possibly you may even have tried one and for whatever reason, you have not been able to successfully complete the agreement, or your creditors did not support your efforts to agree a solution with them. In this case, an application to be adjudicated bankrupt may be the best route for you out of your debt difficulties

Bankruptcy is a formal High Court insolvency solution for people in debt over €20,000, where the other debt solutions are not an option. During the bankruptcy process, the ownership of the person’s property and possessions transfer to the Official Assignee in Bankruptcy (OA). Their responsibility is to ensure that the value of the assets owned by the individual are converted into funds and distributed to the creditors.

Where a family home is involved which has a positive equity value, the OA will firstly discuss with the co-owner (if applicable), whether they can possibly buyout the equity share.

Individuals can apply personally to be adjudicated bankrupt, but must provide a supporting letter from a Personal Insolvency Practitioner confirming why this is the most appropriate option for them.

IN SHORT

  • High Court application in person
  • All unsecured debts are written off
  • Ownership of Property above €6,000 of essential assets (cars etc.) transfers to the Official Assignee
  • Payment order can apply for any surplus income above RLEs and rent / mortgage payments for up to 3 years
  • While bankrupt, person is restricted from holding directorship and must disclose bankruptcy if applying for loans above €650
  • Discharge from bankruptcy is normally after 1 year, subject to the approval of the Official Assignee
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