The framework governing the treatment of a person's liabilities and assets in the context of bankruptcy is provided for in the Bankruptcy Act 1988 as amended. In respect of a mortgage or other secured loan, the secured creditor has the option of either
- continuing to rely on the security and not claiming for the debt in bankruptcy or
- surrendering the security for the general benefit of creditors and claiming for the full amount of the debt along with other unsecured creditors or
- realising (or valuing) the security and claiming for the balance (if any) on the debt after deducting the amount realised (or valued) in bankruptcy.
In terms of new credit, there is no provision to prevent a person either during or post bankruptcy from applying for new credit (subject to, in respect of credit for more than €650, the person disclosing the bankruptcy) and it will be a matter for the lender, subject to consulting the central credit register and complying with all relevant Central Bank macro prudential and consumer protection requirements in relation to the provision of new credit to consumers, to make its own commercial decision on any such application for new credit.