Legal and Financial: Rethink on Bankruptcy Laws a 'Positive Move'
Brown, Caroline, The Birmingham Post (England)
Government proposals to change the current bankruptcy laws are being hailed as a positive move by a firm of Midlands solicitors.
Mr Devinder Singh, insolvency law specialist at the Birmingham office of Irwin Mitchell, believes that the proposals, which will be published imminently, should rationalise the vice-like grip of the existing legislation in the event of business failure.
He said: "Presently, bankrupts may be left without any assets as well as little or no access to credit.
"They are also unable to open a bank account or become a director of a company during the currency of their bankruptcy order, making it difficult for them to kickstart a new enterprise.
"Many commentators believe that this combination is hampering a blooming enterprise culture.
"There are a significant number of people who are declared bankrupt not through malpractice but through external influences beyond their control. This does not necessarily mean that these people are unfit to head up a company and they should not be automatically barred from doing so.
"While limited liability is a privilege which should be made freely available to bankrupts, the new proposals should address this situation.
"However, their overall impact will be judged, in part, by the well-defined guidelines they set up - to ensure that what may be perceived as a loosening-up of the bankruptcy laws does not leave itself open to exploitation.
"These guidelines should cover the particular circumstances of individual bankruptcies to determine the reasons for the insolvency, the role played by the bankrupt and the needs of the bankrupt to start a new business.
"Such evaluation is probably best carried out by the Official Receiver or Trustee in Bankruptcy, but this does beg the question of who will foot the bill? …