When I was in college I was fortunate to get a Summer job as a Bademeister (lifeguard) in the Hetzel Hotel, Freiburg, Germany. Whilst I did not have any opportunities to save any Frauleins that Summer, I did manage to pick up some of the German language (beyond “2 Bier Bitte.”) Unfortunately, I have now forgotten most of my German, which is a pity as we are now dealing with an increasing number of Germans who are considering bankruptcy in Ireland. Having said that, most Germans speak great English.

So why are Germans considering Ireland for bankruptcy? The German personal bankruptcy system is very penal compared to Irish bankruptcy. A well organised Irish bankruptcy could see a person discharged in just 1 year, compared with 3-6 years in Germany.

Some Germans used to go to the UK for bankruptcy, but Brexit has changed all of that. There are big differences between the initial processes for a UK bankruptcy and an Irish Bankruptcy. In the UK some Germans were able to stay in, say, Southend-on-Sea for the weekend, appear in the local Court on Monday, be declared bankrupt and fly back to Frankfurt that evening. The regime is much tighter in Ireland. The main differences in the process of going bankrupt between Ireland and the UK are as follows:

1.     Unlike the UK, Ireland only has one dedicated experienced Judge dealing with all bankruptcy applications, unlike the UK where local courts can adjudicate people bankrupt.

2.      The Irish Judge is supported by an experienced “Examiner’s Office” who “Examine” all relevant documents in detail.

3.      Every bankruptcy has to be supported by a detailed letter from a Personal Insolvency Practitioner who must follow very specific Practice Directions issued by the High Court. The PIP must meet with the Debtor and carry out a comprehensive review of the Debtor’s financial circumstances. The biggest hurdle for the Germans to overcome is convincing the PIP that they have genuinely made Ireland their Centre of Main Interests (the COMI rule.)

In practice, we are finding that the COMI rule is a major stumbling block for many Germans. Only a minority are prepared to make a genuine move to Ireland.  However, when the various Covid lockdowns are lifted and the trend to work from home continues, more Germans may consider performing their jobs from Ireland.

Apart from bankruptcy, we can also offer other solutions such as Personal Insolvency Arrangements or Debt Settlement Arrangements.

If you have any German clients, or other clients, who need bankruptcy advice please ask them to contact myself or Tom Murray. . We are experts on all aspects of Irish bankruptcy and on how to properly change COMI so that no creditor can successfully challenge the process.