Steve on RTE talking about the Irish Insolvency legislation

I was on RTE breakfast radio, giving my views on the Irish Insolvency Legislation and where I saw it affecting the movement of people to the UK.

This followed a piece in the Sunday Business Post the previous day 28th January 2013 about the rise in the numbers of people from Ireland going to the UK for bankruptcy

http://www.rte.ie/news/player/2013/0204/20149804-extraordinary-rise-in-number-of-irish-people-seeking-uk-bankruptcy/

What to expect when you go to court for a bankruptcy hearing

If you are one of the millions who have been struggling ith debt over the last three years then you may have considered a number of debt solutions.

Perhaps you have tried something as simple as a debt management plan, either set up yourself or through a debt management company. For others, it may have been an IVA put in place for you by one of the numerous providers who you can see advertising on TV and in the papers and across the web. In have helped out many people who have tried an IVA but found that they cannot meet the monthly contributions.

If you have tried these solutions and found they didn’t work, or if you have realised that your debt problems need a quick but effective solution, then bankruptcy may be the appropriate solution for you.

The bankruptcy experience can be daunting if you have never been involved in producing official paperwork, or been at the county court before.

You can get help with the bankruptcy process from organisations such as the CAB or ourselves. You can get your bankruptcy pack from me, the CAB or the court.

The court clerks are very knowledgeable and do their best to put you at ease.

When you begin the bankruptcy process you need to have all your information to hand. This would be details of your income and expenditure and your assets and liabilities. This will make the process of completing your statement of affairs. Which is 28 pages long, an easier process.

If you can complete your paperwork yourself, you need to take the statement  of affairs and the petition in triplicate to your court. You will also need a fee of £700 (unless you qualify for a remission). That fee needs to be in cash.

The court clerk will process your papers and check, (a) that you at the correct court, (b) your paperwork is in order and (c) that you have taken appropriate advice. If the clerk is satisfied that all is in order, then they will process your papers and give you a court number. They will take your payment, and advise you where to wait to see the District Judge.

That part of the process should take no more than 30 minutes.

It may be some time before you can get to see the Judge. It mainly depends on when he can fit you in between all his other scheduled work. In some courts the process is structured to enable the Judge to see you before he starts any of the rest of his days work.

The Judge will be concerned primarily in ascertaining that you have taken proper advice and you appreciate what the effects of bankruptcy are. He will check to see that your debts levels are appropriate for bankruptcy. He will make an order with a specific time quoted. This will mean that at that moment 12 months hence you will be automatically discharged.

You will be free to leave they court after the order has been made.

What expenditure can be put down in a statement of affairs

I am often asked what expenditure can be included in a statements of affairs. Quite rightly someone going bankrupt wants to be able to include in their list of outgoings everything that they spend each month. Actually this is also very important because the Official Receiver is entitled to take any money that is deemed as surplus to an individual’s requirement for the benefit of creditors.

The Official Receiver has the power to agree an income payments agreement or ask the court to make an income payments order.

The Insolvency Services guidance to its own staff in its technical manual states that  when making an assessment of the outgoings claimed as essential by the bankrupt, the official receiver should always consider each case on its own merits. An assessment should be made as to whether the outgoings are realistic, relevant and appropriate to the bankrupt’s circumstances and whether outgoings included are sufficient to provide for the reasonable domestic needs of the bankrupt and his/her family.

It goes on to say that any expenditure included in the bankrupt’s statement which appears to be non-essential or included simply to prevent any surplus becoming available should be closely questioned,  e.g. weekly launderette costs are included but the bankrupt has use of a washing machine at home.  Particular care should be taken where the bankrupt has been assisted in preparing his/her statement by a commercial organisation, as a set of pro-forma outgoings may have been included which are not expenses actually incurred by the bankrupt on a day-to-day basis.

This is why when I help a client complete their statement of affairs, I dig down into what is really spent in the family home each week. The completion of this form is very important and it could be the difference between making no payments or thousands of pounds in contribution over 36 months.

As the bankrupt you are entitled to argue that the continued payment of certain expenditure items is required, above that considered reasonable by the official receiver to meet the reasonable domestic needs of you and your family.  If you persist in your argument, the official receiver should ask for further information detailing the extenuating circumstances justifying why you consider this an essential expenditure.  The Official receiver then has access to a manual and case law which helps him decide of your expenditure is reasonable for your needs and those of your family.
I have often found that with a good argument and a no back down attitude it is often possible to get the Official Receiver to back down. Getting advice on the expenditure that can be claimed on a statement of affairs can be the best advice you take in relation to going bankrupt.  

In November I did an article with others in which I highlighted the numbers of business people who were quitting the Republic to start new lives in then UK and in the process go bankrupt and rid themselves of irish debt.

The link to that article is below

http://www.independent.ie/business/irish/hundreds-of-bust-business-figures-flock-to-uk-for-soft-bankruptcies-3296418.html