The outdated bankruptcy laws currently in force in Ireland have resulted in many indebted individuals fleeing to declare bankruptcy in the UK in a practice that has become known as “bankruptcy tourism”. In the UKbankrupts are automatically discharged from bankruptcy after a period of twelve months, which is naturally proving to be far more desirable than the period of up to twelve years which currently applies in Ireland.
The increasing frequency of such bankruptcy tourism has raised an important issue in relation to the recognition and enforcement of foreign bankruptcy judgments in Ireland. Individuals who are declared bankrupt in the UK may believe that their debts shall automatically be discharged inIreland, however this is not the case. It is essential to note that there is a legal procedure which must be fully complied with to enable a UK bankruptcy judgment to be recognised and enforced inIreland. An application for the enforcement inIreland of an insolvency judgment must be made to the Master of the High Court pursuant to the European Communities (Personal Insolvency) Regulations 2002. There is a strong emphasis on EU member state recognition of judgments delivered in other member states, therefore, the grounds for non-recognition of such judgments have been reduced to the minimum necessary. However, the obligation remains to make such an application in order to enforce a UK bankruptcy inIreland.