The separate consultations will look at whether the rules need to be changed, The Independent on Sunday reported.

One consultation is being undertaken by the Department for Constitutional Affairs looking at people who use bankruptcy to escape their obligations, while the Insolvency Service, part of the DTI, is looking closely at individuals' voluntary arrangements.

Rules under the Enterprise Act mean bankrupts can be rehabilitated in only a year, and has taken the stigma out of going bust.

A record 11,200 people filed for bankruptcy between April and June in England and Wales, a 33% increase on last year.