According to Government figures today, the number of people filing for bankruptcy in the first quarter of 2006 is over 80% higher than for the same quarter in 2005. In fact the total number of bankruptcy petitions for this quarter is just short of 40% of the total for the whole of last year.
A colleague of mine was one of the people that filed for bankruptcy last year and from what he's told me there are people out there who actually specialise in taking advantage of the bankruptcy laws. They are - if you pardon the oxymoron - professional bankruptees.
Since Gordon Brown changed the law, those who declare themselves bankrupt only have to remain in that state for 12-36 months. After that they're free to start applying for credit again and the slate is effectively wiped clean. It's hardly a surprise that such a system should be abused.
Perhaps we should be ammending the law in order to spot serial bankruptees who are making an easy fortune?
1 comment:
Yes, the enterprise act does reduce the bankruptcy period as a recognition that entrepreneurs have to take risks and that the economy benefits overall from nurturing these risk-takers - however, it also has provisions for much, much harsher penalties for those who abuse the system.
R. Monkey Esq.
www.recessmonkey.com
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