Law firm, Thomas Eggar, consider that the Enterprise Act 2004 does not provide sufficient protection against dishonest bankrupts.
The Act was designed to provide a modern bankruptcy regime that encouraged business start-ups. It also aimed to provide a fresh start to those who have failed through no fault of their own. Under the act, the period of bankruptcy has been reduced from three years to one year, and any restrictions have been replaced with a regime of Bankruptcy Restriction Order. This is designed to stop the dishonest bankrupt from obtaining credit, trading under a different name or holding company directorships from between two and fifteen years.
But the new legislation cannot be backdated. This could mean that dishonest bankrupts will avoid a Bankruptcy Restriction Order for activities carried out before April 2004, and could apply to around 4,500 people.
Our view
Enterprise in the UK is a good thing and should be encouraged. The changes to bankruptcy laws were intended to be a good thing but as ever with things that are meant to be good, the few bad eggs spoil it for the rest of us.