Will I Lose My Home? Bankruptcy does not mean definitely losing your family...
At Lynch Solicitors we are one of the few solicitor firm who specialise in dealing with Bankruptcy & Personal Insolvency. We offer a one-stop service in an area which has undergone tremendous change in recent times, most notably, the introduction of one year bankruptcy. We have appeared for clients in the High Court Bankrupcy Court. We appreciate that the decision to enter bankrupcy is not an easy one to make. We understand that the decision has many aspects that need consideration. We are happy to give clients the benefit of our experience in this relatively new and developing area of law.
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If you have been struggling with debt and want to plan a way out, contact us. If you want to have a chance of protecting your family home, contact us .
Bankruptcy in Ireland has undergone a lot of change recently and now presents a promising option for individuals to finally deal with crippling debts and start afresh.
The most important reform is the introduction of one year bankruptcy in Ireland following the commencement of the Bankruptcy (Amendment) Act 2015. The reduction from three years to one, has made the option of bankruptcy much more viable for people struggling with often mounting debts.
At Lynch Solicitors, we have experience of guiding our clients through the bankruptcy process to ensure the best possible outcome. We deal with the process from all aspects and from beginning to end.
Bankruptcy is a process which results in a person clearing unsustainable debt and starting again.
The ownership of an insolvent person’s property debts transfers to what is called the Official Assignee in Bankruptcy to be sold by him for the benefit of those to whom the individual owes debts (creditors).
Any debts included in bankruptcy are written off. The Official Assignee will deal with your creditors for you, so this will put an end to any demands for unpaid debt – no more calls, letters or visits.
There may be reasons to keep a debt outside of bankruptcy (such as continuing to pay reasonable mortgage payments on a family home to prevent its transfer to the Official Assignee) and advice from an experienced solicitor is essential in navigating this. Some debt cannot be included in bankruptcy, such as court fines in respect of criminal offences, or any new debts you accumulate after the date you are made bankrupt.
It is possible to keep a family home through the bankruptcy procedure but each case will depend on its facts.
Of note is the inclusion in the new Act of the section which provides that the family home will automatically revert to the bankrupt after three years if the Official Assignee has failed to sell it.
Bankruptcy proceedings are brought in the High Court.
The application for a Bankruptcy Order is filed in the Office of the Examiner of the High Court.
We can guide you through this entire process, step by step.
The Official Assignee will attempt to sell the property and then make sure that the proceeds are shared out fairly among creditors.
Any outstanding debt will be written off after a three year period.
Bankruptcy normally lasts for 1 year but you will usually have a duty to contribute surplus income (income less reasonable living expenses) towards your debts for up to 3 years.
Yes, you are entitled to have a reasonable standard of living. This includes food, clothing, education, healthcare and a modest allowance for savings.
Under the ISI model, this means a higher standard than merely living at a subsistence level, which people often exist on when in debt.
Bankruptcy is not suitable for some situations and at Lynch Solicitors we have a proven track record of guiding clients through the various alternative avenues open to them when struggling with debts.
The Personal Insolvency Act 2012 offers a way out for people with unmanageable personal or mortgage debt by offering Arrangements administered by PIPs.
A Debt Settlement Arrangement (DSA) will cover loans of €20,000 or more, with no limit. The debtor will have to pay off a certain amount for up to 5 years and the balance may then be written off.
A Personal Insolvency Arrangement (PIA) will apply specifically to mortgage holders for secured and unsecured debts of €20,000 to €3million. 65% of the lenders must be in agreement for some of the debt to be written down. A borrower could have the option of handing back their property and paying part of the balance in monthly instalments over 6 years and the remainder would then be written off. Those who avail of a Personal Insolvency Arrangement can only do so once. Careful consideration needs to be given by those who wish to seek debt relief in this manner.
Personal Insolvency Practitioner (PIP)
John M. Lynch is authorised by the Insolvency Service of Ireland to carry on practice as a personal insolvency practitioner. As the first Solicitor PIP licensed under the Act he will make the proposal on behalf of the debtors provided they satisfy a number of criteria i.e. must be living in the State for a year before the date of application or domiciled here, the property which the loan was taken out for must be within the State, the borrower must be unable to pay their debts as they fall due and not have been declared bankrupt etc. The PIP will also verify and certify a financial statement prepared by the debtor confirming their financial position.
Communicate with Your Lender
The old adage of the “once in a lifetime opportunity applies” and it is important to be aware that those who avail of a Personal Insolvency Arrangement can only do so once.
For those people in debt for mortgages on their homes it is very important to be aware that this arrangement will only be available if they have been engaging with their lender for at least six months prior to their application.
Co-operation and negotiation are therefore key to the success of any such application and those who ignore their arrears will not be able to avail of the new arrangement.
It is vital therefore for those who may wish to avail of the new arrangements to be seen to be actively corresponding with their lenders if not doing so already.
As a team, we have continued to improve our expertise and John M. Lynch completed a Diploma in Insolvency and Corporate Restructuring and is the first registered Solicitor PIP in Ireland.