Bankruptcies could top 7,500 next year amid 'shocking' debt levels
on 13/09/2013 00:00:00
Instead, Mr Williams predicts that by default bankruptcy will be become the chosen route for thousands of people.
He pointed out that going to Britain to file for bankruptcy would not be an option for the vast majority of people as an Irish applicant had to spend six months there before they can make an application and must remain for another 12 months, which is a total of 18 months.
He predicted that British courts would be paying much more attention to evidence presented that the person's centre of main interest wasn't in Ireland.
"It is really only an option for the rich as very few people can afford to pay rent in somewhere like London for 18 months. It is not practical in some cases for an entire family to relocate to the UK," he said. Stating the level of personal debt is "quite shocking," he also questioned whether the Office of the Official Assignee would have enough resources to cope with the dramatic rise in the number of bankruptcies over the next 12 months.
Official Assignee chief, Christopher Lehane confirmed the number of staff had grown from eight to 30, including six professional accountants on contract, with plans to recruit another two staff.
Mr Lehane said more staff would be redeployed to the office, if necessary, to cope with any dramatic surge in bankruptcy applications as staffing levels will be regularly reviewed in line with applications.
A recent Red C poll, conducted for Stubbs Gazette, predicts that almost 7,000 people will apply for bankruptcy when the newly reduced three-year period comes into effect in the coming weeks.
There are 153 Irish bankrupts serving under the old 12-year regime.
Mr Williams believes the projection for 7,500 bankruptcies is conservative and could be even higher based of the scale of debts he has already seen.
With 60,000 individuals availing of insolvency in Britain since the introduction of the Insolvency Act in 1986, he estimates that about 4,000 Irish people annually will avail of this new financial mechanism.
He predicted it would take a long period of time to deal with the personal debt issue in Ireland
"Nama has taken out the big borrowers, now we still have to deal with the small borrowers," he said.
He believes that very few insolvency arrangements will be entered into because the banks effectively have a veto and in most cases banks will be the biggest creditor.
He confirmed his practice was advising two Clare individuals, one of whom was a well-known professional, to go down the bankruptcy route
"People would be surprised with the number of professional people who took a punt on property investment and were unsuccessful," he said.