Legislation for one-year bankruptcy to be approved to be approved by Cabinet

The Cabinet is set to formally approve legislation next week which will see the term of being bankrupt cut to just one year, the Irish Examiner has learned.

The bill, which has been championed by Labour TD Willie Penrose for almost a year, will be passed by Cabinet for enactment. Despite longstanding Fine Gael objections, Taoiseach Enda Kenny has said Justice Minister Frances Fitzgerald will bring the memorandum to Cabinet next Tuesday.

The move will be seen as a major victory for the Labour Party and in particular Mr Penrose. His proposals were also opposed by the Department of Finance but Ms Fitzgerald is finalising her analysis of a report on the topic that was compiled by the Oireachtas Joint Committee on Justice, Defence and Equality.

Mr Kenny said priority would be given to its passage through the Oireachtas and his intention would be that it can happen in the current Dáil session.

Reducing the bankruptcy term to one year would bring Irish law in line with UK regulations. Mr Penrose said he hopes the new regime will end the painful stigma around bankruptcy.

“It has been nine months in gestation and finally it is going through,” he said. “It will bring a great deal of relief to people. I am still getting lorry loads of letters on this,” he said. “We hear a lot of talk of this being a great place to do business. I am very pleased it is now happening. It will empower the distressed borrower to get back going again. Bankruptcy will have lost its stigma.

“This will force banks to wake up to reality, this will level the playing field. This will be a real benefit to the plain people of Ireland.”