Thankfully, the troika will continue to review Ireland’s compliance with the Memorandum of Understanding, even after the last tranche of funding is handed over at the end of this year. Because, without the Troika, we would not be getting any reform of our draconian bankruptcy arrangements; it was the Troika which has frog-marched us into providing an adequate mechanism to allow seriously insolvent individuals to deal with their debts and be given a new start where they could contribute to the economy. This Government has in fact missed targets for the implementation of reforms, and even today, we have a Personal Insolvency Act which was signed into law by President Higgins on St Stephen’s Day in 2012 but it has still not been commenced. So, the three-year bankruptcy, the debt relief notices, the controversial personal insolvency scheme are all pie-in-the-sky at present though it is hoped that Minister for Justice and Equality, Alan Shatter will commence the Act shortly.
Meanwhile, on Friday in the US state of Connecticut, an Irishman, developer Sean Dunne with debts of over €350m, with a cheque for USD 306 (€239) initiated a process that will last 120-150 days and may see Sean emerge financially reborn by July 2013. Sean has engaged an attorney, or solicitor as we might say, but he didn’t have to – the fee pays for the State to provide a bankruptcy trustee.
Sean has been given a platform by the Sunday Independent today to set out his side of the story. In it, he says “I consider my debt to the Irish State to be cleared” after a lifetime of developing property in Ireland during which he employed hundreds and paid millions in tax and levies.
Many indebted Irish people will today contrast their options with Sean’s story.
How many Irish people would dearly love to be able to hand over a payment of €239 to the courts and say, “there, now you sort out my finances and by July 2013, I start with a clean sheet” Yes, it may require you to hand over your home in some instances, it may require you to hand over any savings and other valuables, but by August 2013, you would be financially reborn. And if you wanted to take the moral high ground, you could point out how much income tax and VAT and road tolls and suchlike that you had paid in your lifetime, and like Sean Dunne high-and-mightily announce “I consider my debt to the Irish State to be cleared”
So, how will Minister Shatter justify the half-hearted reforms in the new Personal Insolvency Act to the domestic audience? How can Minister Shatter defend his reforms if people with a few hundred thousands of euros debts will be put through the mill for three years and Sean Dunne, owing hundreds of millions can emerge clean as a whistle in four months?
Here is a list of NAMA developers who have been made bankrupt outside of Ireland (it may not be comprehensive)