“There is no forgiveness in Ireland for business people who try hard to succeed but end up having to file for bankruptcy,” according to Fine Gael Innovation Spokesperson Deirdre Clune TD.

Bankruptcy is viewed in Ireland as the result of money mismanagement or fraud. Little thought is given to the people who have worked hard but seen their businesses fail due to the current recession. Our laws take the same view, and severely penalise people for 12 years after the declaration.

Currently if a business person is declared bankrupt, they cannot obtain a loan for more than €630 without disclosing their status as bankrupt. Their assets are automatically vested and they risk losing their family home. Their bankruptcy status is not discharged for 12 years.

As Fine Gael Innovation Spokesperson I believe we need to change the way that society views business failure and remove the stigma associated with failed ventures. The Innovation Task Force and the Law Reform Commission have both recommended that the laws, originally written in 1988, be modernised and brought into line with our European counterparts where penalties are an average of five years.

We should consider introducing a system similar to that in Northern Ireland which allows debtors to work through their financial difficulties without losing all their property.

We must recognise, however, that we do need a penalty for financial mismanagement or fraud and there must be some balance for the creditors involved. We need to change our laws to ensure that the declaration of bankruptcy works as an efficient way of collecting debt owed, and that bankruptcy does not become something that is a means of relief for reckless business investments.

Also, in this time of economic depression with many people finding the only way to gain employment is through self-employed ventures, we need legislation that will encourage entrepreneurs to take risks. Research supports the fact that generous bankruptcy laws have a significant impact on the level of self-employment on an economy while they are also the most important contributor to high levels of self-employment more than other factors such as GDP growth.

This economic depression we are experiencing is affecting everyone. Bankruptcy should be a penalty for debts owed, but not a life-long punishment for business mistakes that could be the cornerstone of future success.