Almost 800 people will be discharged from bankruptcy in Ireland today – the first group to qualify for a faster discharge under changes made to the country’s laws last year.

The 793 bankrupts will be able to start again from today “without the burden of unsustainable debt”, Insolvency Service of Ireland (ISI) director Lorcan O’Connor said last night.

Meanwhile, people who entered bankruptcy before July 29th, 2015 – the date from when the 12-month discharge applies – will also be automatically discharged today. These individuals would have been tied down for three years up until the rules were changed.

The shorter qualifying period “has been a long time coming”, said Mr O’Connor, adding that the changes to Ireland’s insolvency system over the last 12 months should have been introduced earlier.

Ireland’s bankruptcy laws, unchanged for more than a century, have been radically overhauled in less than three years. Up to 2013, it took people 12 years to qualify for a discharge.

The 12-year rule was one of the longest restrictions in the European Union, before it was then cut to three years. However, the three-year limit was quickly criticised as being restrictive, too, before it was changed last year.

Mortgage payments

The new scheme for people in mortgage arrears will allow borrowers meet Personal Insolvency Practitioners for advice and assistance

The new arrangements, Mr O’Connor said, should result in more people “finding permanent and sustainable solutions over the coming months”.

However, the service was accused of “spinning the numbers” by David Hall of the Irish Mortgage Holders Association, who said that 33,000 people in long-term arrears are not being dealt with.

“I don’t think the system is working. It is too cumbersome and there are too many delays. I don’t like to blame the ISI but it is disingenuous when it points to an increase in applications.

“How many family homes are being saved? How many deals are being done to keep people in family homes? Those numbers are tiny,” Mr Hall said.

‘Insolvency solutions’

In all, 735 people applied between April and June for a Protective Insolvency Arrangement, which can restructure up to €3 million worth of secured debts, plus unsecured debts over seven years. The €3 million limit can rise if creditors agree.

Since last year, a debtor covered by a Personal Insolvency Arrangement can seek the protection of the courts to ensure the family home is not threatened by a refusal of the creditors to reach an agreement.

A total of 345 people have applied for a Debt Settlement Arrangement, which allows a debtor to made agreed repayments to unsecured creditors up to six years before they are declared solvent again.

A further 129people have applied for a Debt Relief Notice, which is designed to help people in financial trouble who have very low disposable income or assets.

It allows for the write-off of up to €35,000 in qualifying debt, subject to a three-year supervision period.