The relaxed bankruptcy regulations that are available in the UK could be taking their toll on the credit crunch, it was reported in The Times.
Current bankruptcy rules state that bankrupts can be discharged within a year, instead of the previous three, and apply for credit once more.
There have been calls from the National Institute of Economic and Social Research for international cooperation, in order to crack down on bankruptcy regulation.
However, Martin Weale, director of the institute, finds that the relaxed attitude towards bankruptcy will mean consumers will take excessive risks. 'This Government has done its best to make things worse' he said.
Currently in the USA, bankruptcy and mortgage rules allow debtors to wipe their debt clean without any penalty.
The insolvency first quarter results which show the amount of Individual Voluntary Arrangements and Bankruptcy figures are released today.
Further reading:
Lax British bankruptcy rules worsen credit crunch
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