New bankruptcy legislation has commenced today, which will see the introduction of a one-year bankruptcy term alongside a number of other reforms.

Justice and Equality Minister Frances Fitzgerald has signed an order bringing the provisions of the Bankruptcy (Amendment) Act 2015 into force.

The major provision of the new Act will see the normal duration of a bankruptcy term reduced from three years to one year - bringing the process into line with England, Wales and Northern Ireland.

However, the Act also contains a provision allowing for bankruptcy to be extended to 15 years for some people who do not cooperate or who try to conceal assets or income.

The Act also give new powers to the Official Assignee in Bankruptcy among other reforms.

People already in bankruptcy will receive the benefit of the new rules as a result of transitional arrangements included in the new Act.

The new measures are aimed at removing unnecessary costs and delays for debtors and creditors, as well as freeing up court resources and streamlining the administration process.

Minister Fitzgerald said, "I am very pleased to commence the provisions of the Bankruptcy (Amendment) Act 2015. The Act is a significant reform of our bankruptcy laws and reflects a fundamental shift in attitudes towards indebtedness. Our legislation no longer punishes people who, in most cases, through no fault of their own find themselves with intractable debt.

"However, bankruptcy is still not going to be an easy option. People seeking bankruptcy will have to co-operate in an open manner with the bankruptcy process, and hand over their income and assets towards repayment of their debts," she added. 

The Insolvency Service of Ireland has welcomed the new legislation, with Director Lorcan O’Connor saying "the reduction in the bankruptcy term means that there has never been a better time to take the first step to solvency and a fresh start".