The Bankruptcy Act 1988 sets out 7 acts of bankruptcy (these include not paying bills on time, transferring assets in order to avoid paying creditors, making payments to one creditor over another, if a court order has been served for the seizure of goods, leaving the country in an attempt to escape creditors, applying for an insolvency arrangement or a petition for a bankruptcy summons has been served) any of which can be used by creditors to petition for the debtor to be adjudged a bankrupt if they do not pay their bills immediately.
i) Can I declare myself bankrupt?
Yes a debtor can file for bankruptcy themselves if they are in a position that they cannot pay their bills and/or they are insolvent.
Anyone who cannot pay their bills and is not able or willing to enter into an arrangement to settle their debts through either a voluntary arrangement or a formal insolvency arrangement through the Personal Insolvency Act 2012 can declare themselves bankrupt.
ii) If I am self employed can I declare myself bankrupt?
A self employed person can declare himself bankrupt and can continue to be self employed while in bankruptcy. However the debtor cannot be a company director nor can they hold themselves out to be managing a company.
If the debtor is self employed they must trade under their own name or have their name included in the business name under which they are trading while an un-discharged bankrupt.
Some professions specifically exclude a bankrupt practicing these include solicitors, auctioneers and accountants. It will be important to establish if a debtor’s trade or profession has any limitations on trading as an un-discharged bankrupt.
More details of bankruptcy in Ireland can be found in the Irish Bankruptcy Guide published by Paul Carroll Accountant of NEO Financial Solutions