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Is Holiday Over For Bankruptcy Tourists?

posted 15 Jul 2013, 04:46 by Mpelembe Admin   [ updated 15 Jul 2013, 04:46 ]

 

Reuters Business  Report - Joe Curran is one of Ireland's growing number of bankruptcy tourists.

Credit crunch debtors who cross the border to go bust in Britain.

In just 12 months he wiped out over a million euros of debt.

In Ireland, it would've taken 12 years.

JOE CURRAN, BANKRUPTEE, 

"It was a life sentence. You were a criminal here if you couldn't pay your debts. And over in the UK, it was a way of sparking the entrepreneurs, getting them out there, getting them going again. So this for me was an absolute no brainer."

Joe was a property developer and a victim of Ireland's housing bubble collapse.

Empty units are all that's left behind.

The crisis triggered a surge in bankruptcy tourism that's showing no sign of slowing.

Demand is so high, Dublin solicitor Anthony Joyce now specialises in the practice.

 ANTHONY JOYCE, PRINCIPAL, ANTHONY JOYCE & CO.SOLICITORS,

"It's extremely popular. People are coming to us on a daily basis. It ranges from about 4 or 5 a day, up to 10 to 20 people a day. It's a huge proportion of our business at the moment."

This firm alone has dealt with over a billion euros of debt since the crisis began.

Clients range from families to former property moguls.

Even a former government minister as well as Ireland's one-time richest man Sean Quinn are among those who've turned to the UK to clear their debts.

 REUTERS REPORT IVOR BENNETT,

"Bankruptcy tourism is allowed under EU law. The only rule for the UK is that applicants must live here first for 6 months for it to count as the centre of your main business interest. And the proof for that is pretty basic - things like utility bills, supermarket receipts, the details of your dentist. In some cases, the process is over within minutes."

The bankruptees are allowed to return home once their 12 months is up.

But the problem for Ireland is, many don't want to.

Trinity College economics lecturer Constantin Gurdgiev.

CONSTANTIN GURDGIEV, ECONOMICS LECTURER,TRINITY COLLEGE DUBLIN

"In order to be an entrepreneur you have to take risks. Ability to take risks and willingness to take risks is something that normally in a traditional entrepreneurial-centred society is encouraged. In Ireland, we are throwing them or incentivising them to leave the country right now."

Ireland is trying to clamp down on the exodus - the government asking UK courts to be more rigorous.

It's also reducing its own discharge period, but even with the new laws, bankruptees could spend up to 8 years in financial purgatory.

As long as that's the case, debtors in Ireland are likely to head for the exit.



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