Bankruptcy Immigrants

Fascinating story in the Guardian about Irish debtors temporarily moving to the UK in order to gain access to more favorable bankruptcy law.  I guess the Brit's have a more lenient version of 522(b)(3) or a looser good faith filing doctrine/plan approval/discharge requirement.  I wonder how long this sort of international loophole will remain open within the EU.  I wouldn't be surprised to see a lot of Spanish immigrants to the UK between more favorable bankruptcy law (although Spain recently liberalized its bankruptcy law) and the Spanish economy.    

Comments

[AMC]

It has been a problem for a while in Ireland - 12 years to get your discharge is a bit much:

http://www.businessspectator.com.au/bs.nsf/Article/Irelands-brutal-bankruptcy-reality-pd20101109-AZRTF?OpenDocument

http://www.guardian.co.uk/business/2011/feb/18/ireland-property-crash-bankruptcy-tourism

Irish bankruptcy reform will take the waiting period down to three years - but I am not sure of the present status of the proposed change:

http://www.reuters.com/article/2012/01/25/ireland-bankruptcy-idUSL5E8CP35U20120125

[Adrian Walters]

It started with the Germans and the Irish have now caught on. Anyone interested in the background and drivers might like to take a look at a thing I co-authored a while back for the International Insolvency Review... http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1630890 Am not sure I hold with our conclusion anymore. Although the EU Regulation on Insolvency Proceedings is currently being reviewed by the European Commission and amendments are expected in the next 1-2 years, I suspect the fundamental EU law principle of free movement will hold sway. In other words, it is more likely we'll see increasing convergence of national laws via domestic reform initiatives of the sort being pursued in Ireland at the moment.

[Joseph Spooner]

I have written short updates on the bankruptcy reform process in Ireland and a recent high-profile cross-border case, these might be of interest:

http://www.compasscayman.com/cfr/2012/04/11/Good-fences--Cross-border-bankruptcy-law-and-Ireland%E2%80%99s-%E2%80%9Cother%E2%80%9D-debt-crisis/

http://www.jordansinsolvencylaw.com/articles/guest-post-ucl-s-joseph-spooner-on-the-modernisation-of-irish-personal-insolvency-law

The current timeframe for reform in Ireland is that a Bill is due to be published before the end of June, although it may be closer to the end of 2012 before legislation is enacted: http://www.irishtimes.com/newspaper/ireland/2012/0427/1224315234033.html