Taxi driver relieved to be declared bankrupt

It was over in 60 seconds. And Rory Askins-Byrne didn’t have to say a word.

Nearly six years after he first found himself drowning in debt after making some very poor overseas property investments, the former taxi driver was in the High Court yesterday morning for a bankruptcy hearing presided over by Justice Brian McGovern.

As the judge speedily went through the case list before him, his court room was given a glimpse of just how chronic Ireland’s personal debt crisis has become.

More than 30 people were pleading bankruptcy in Court Six yesterday, with most on the list voluntarily and willing to admit to themselves and the world at large that they were no longer able to service any of their debts.

When Mr Askins-Byrne's turn came, his solicitor, Anthony Joyce, stood up and made his presence known. Without looking up, Justice McGovern repeated what he has said in all the other cases that had come before him: "I have read the papers and they are in order so I dispense with the necessity for a further statement of affairs."

Debtors' register
He then ruled that Mr Askins-Byrne's name be published on the ISI's debtors' register, and he was declared bankrupt.

After a final hearing at the end of April he will be free of €60,000 worth of secured and unsecured debt which has served as a millstone around his neck since the bubble burst more than five years ago.

Now his creditors will be forbidden from pursuing him. And the phone calls and letters which have blighted his life and seen him sell everything he owns and fall into depression will finally stop.

In the spring of 2017 he will exit the bankruptcy process and at just 36 he can start again with a clean slate.

It was a monumental moment in his life, but an anti-climax all the same. “I was very nervous going in to court,” he said.

“I thought the judge might ask me a few questions, but there was nothing.

“It happened so fast. I don’t really feel any different. Maybe it will sink in later and maybe I will feel a greater sense of relief tomorrow or the next day. But all I can say now is, this has been a long time coming.”

The corridor outside the court room was filled with people in very similar positions to Mr Askins-Byrne. They were very easy to spot.

These bankrupts all looked tired and anxious as they sought out the Official Asignee Inspector from the Insolvency Service of Ireland (ISI). As soon as they are allowed to leave court they have to schedule interviews with him to iron out the final details of their bankruptcy.

While Mr Askins-Byrne gave the inspector his details, his solicitor talked processes. He described the actual bankruptcy proceedings as less traumatic than many might expect but said the build-up and all the associated paperwork were unnecessarily complex and the costs too high.

The assignee’s fee is €650, while the stamp duty on the bankruptcy petition is €190. The sworn affidavit cost Mr Askins-Byrne a further €10, with €20 stamp duty liable on that, and posting details of his bankruptcy on Iris Oifigiúil will set him back €45, a total of €915 - or half the money he managed to raise through the sale of his car four weeks ago.

“The process is still too complicated,” said Mr Joyce. “If it was simplified then more people would be able to avail of bankruptcy, and that would force banks to do more and better deals with people to stop them entering the process.”

While Mr Joyce handled the legal aspects of Mr Askins-Byrne's case, Karl Deeter crunched the numbers and made the case for bankruptcy rock solid. Together the pair trade under the BankruptcyAdvice.ie banner.

Mr Deeter thinks the bankruptcy road should be one more travelled. “This is a perfectly transparent process and it needs to be used by more people because it is the only thing that will make our banks realise that indebted people will not just cave in to their demands and sign up to lifetimes of austerity by reaching repayment arrangements that actively work against them.”

Mr Askins-Byrnes is in a no-lose position. But what about those with homes to go to? By opting for bankruptcy instead of one of the alternative arrangements open to the insolvent, most of those who own their own homes will lose them at the end of the road.

“I hear a lot of people talking anecdotally about those in debt having a strong attachment to their home, but in my experience this emotional connection has been exaggerated and I don’t see it when people’s backs are against the wall,” says Mr Deeter. “When they open their eyes to what their banks are trying to make them sign up to, the connection can be broken pretty quickly. Having an attachment to a heavily indebted home is like having an attachment to a cancerous tumour. It is not healthy.”

Insolvency: the options

Debt Relief Notice: This provides debt relief for people with virtually no disposable income or assets and no prospect of being able to pay off the debt. Qualifying applicants write-off debt up to €20,000 subject to a three-year supervision period. Applications must be made through Approved Intermediaries (AI).

Debt Settlement Arrangement: This provides for the agreed settlement of unsecured debt with one or more creditors over a period of five years and is for those whose level of income, assets and debts makes them ineligible for a DRN. Personal Insolvency Practitioners (PIP) are involved, and some repayments must be made in return for debt write-down. When the agreed period ends those with a DSA are discharged from their debts.

Personal Insolvency Arrangement: This allows secured debt up to €3 million and unlimited unsecured debt to be settled. Such arrangements run over a six-year period and the applicant must be able to make some repayments in return for debt write-off. When the agreed period ends those with a PIA are discharged from unsecured debts, while secured debt is only discharged to certain agreed individuals.

Bankruptcy: This is the process where the ownership of an insolvent person’s property transfers to the Official Assignee in Bankruptcy to be sold by him for the benefit of those to whom the individual owes debts. When the person’s property is sold, the Official Assignee will make sure that the proceeds are shared out fairly among creditors, and any outstanding debt is written off. Bankruptcy normally lasts for three years. Those who are declared bankrupt have a duty to contribute from surplus income towards their debts for up to five years.