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Bankruptcy: Almost 800 Irish applicants benefit from shorter, one-year term

Cash and coins in euros Image copyright PA
Image caption Prior to 2013, the Republic of Ireland had an even more onerous regime, in which bankruptcy lasted for 12 years

Almost 800 people have been discharged from bankruptcy after a one-year term in the Republic of Ireland, benefitting from a recent relaxation of the rules.

The Irish government amended the law in January, cutting the duration of bankruptcy from three years to one.

Prior to 2013, the Republic of Ireland had an even more onerous regime, in which bankruptcy lasted for 12 years.

The system has been extensively reformed in the last few years, in order to reduce delays and costs.

'Bankruptcy tourism'

The changes came in response to some of the problems thrown up by the Irish banking crisis and property crash.

Many people were saddled with huge debts and mortgages they could not pay.

Because of the tough 12-year regime, several Irish people, including some high-profile property developers, opted to declare themselves bankrupt in the UK, where they could be released from the restrictions in 12 months.

The process was referred to as "bankruptcy tourism" and led to calls for reform.

On Friday, 793 people who were made bankrupt on or prior to 29 July 2015 were released from the process, according to the Insolvency Service of Ireland (ISI).

'Fresh start'

The government-backed organisation was set up in 2013 to help tackle personal debt problems.

Its director, Lorcan O'Connor, said: "As of today, almost 800 former bankrupts can have a fresh start without the burden of unsustainable debt."

He also welcomed a new state-funded scheme that enables borrowers with mortgage arrears to access advice from a personal insolvency practitioner.

The ISI said the aim of the scheme is to "find a sustainable solution that keeps a person in their home, where possible".

Mr O'Connor said it "should ensure that anyone in difficulty can now get the help they need".

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