The contrast between the UK and Ireland in dealing with personal debt problems is quite remarkable. The most startling contrast is perhaps the difference in the bankruptcy legislation.
In the UK most bankruptcies are discharged within 1 year leaving the debtor debt free and in a position to begin repairing their credit worthiness. In Ireland the bankruptcy process can entrap individuals in debt for up to 12 years. For that reason many Irish people are traveling to Britain to try to petition for bankruptcy in what is considered an enlightened and progressive legislative regime. Whether you call it bankruptcy tourism or old fashioned economic migration the incentive to seek a foreign solution to an Irish problem is huge. People just want their lives back and if it can be done abroad, then it makes sense to travel to the UK and try and sort their problems out.
Apart from the enlightened bankruptcy regime in the UK there is a whole range of debt solutions available for people with debt problems. The biggest success in the twenty three years since the enactment of the UK Insolvency Act in 1986 is the range of tremendously positive benefits of Individual Voluntary Arrangements also known as IVAs. These are solutions which can help financially strapped individuals with debts of over £15,000. IVAs nor a similar solution exists in Ireland. The UK has also introduced Debt Relief Orders to cater for people with debts of less than £15,000 and Administration Orders for people with debts of less than £5,000.
The only light at the end of the tunnel for Irish debtors is the recent publication of a hugely impressive consultation paper by the Irish Law Reform Commission on the subject of Personal Debt Management and Debt Enforcement. A wide range of possible solutions are explored and recommended. For Irish consumers however, the timescale for introducing and passing real and effective legislation is likely to be long drawn out and given the huge economic and political pressure on the current Irish government, don’t expect any new laws or quick solution any time soon.