Q.  I am unemployed and on a jobseeker’s payment. I have an enormous number of debts and I can’t see any way that I can repay them. Can I declare myself bankrupt and start again?

30.08.10

Declaring yourself bankrupt is a very serious step and it can take up to 12 years before you can ‘start again’. Bankruptcy proceeding are carried out in the High Court and can be very expensive and time-consuming. You can apply to the High Court yourself or a creditor can apply to have you declared bankrupt. Alternatively, you could apply for an arrangement under the protection of the High Court, to give you time to present a proposal to your creditors – perhaps to pay them a proportion of the debts.

The purpose of bankruptcy is to distribute your assets fairly among your creditors and protect you from these creditors. Once you have been declared bankrupt all of your assets, with the exception of necessities up to a value of €3,100, are transferred to the Official Assignee of the Court, who will sell them and pay costs, expenses, fees and certain priority debts (such as taxes) and distribute the remainder among your creditors. You can be conditionally released from bankruptcy after 12 years but you cannot borrow over €650 or trade without disclosing the bankruptcy, and cannot act as a director, manager, auditor, liquidator or receiver of a company without permission of the court. Other consequences of bankruptcy are that you cannot travel without informing the court, assets that you inherit or are given can be claimed by the court and you may not hold elected representative office. MABS publishes a useful leaflet on bankruptcy (pdf) and money advisers in MABS offices nationwide can discuss your options with you in detail.

Citizens Information: Buncrana 074 9363496; Carndonagh 074 9373741

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