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New bankruptcy legislation brings an end to the one-size-fits-all approach.

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M2 PRESSWIRE-31 March 2004-UK Government: New bankruptcy legislation brings an end to the one-size-fits-all approach(C)1994-2004 M2 COMMUNICATIONS LTD

RDATE:03302004

New bankruptcy laws which will encourage enterprise while cracking down on irresponsible and reckless creditors come into force tomorrow (1st April 2004).

In the biggest shake-up of personal insolvency laws for a generation, the Enterprise Act 2002 marks the end of the one-size-fits-all approach to bankruptcy. It will introduce a fairer regime for those who have failed through no fault of their own, backed up by tough new measures for the minority of bankrupts who take advantage of their creditors and the public.

The Act will:

* provide for the automatic discharge of most bankrupts after a maximum of 12 months;

* introduce Bankruptcy Restriction Orders (BROs) to protect the public and business community from bankrupts whose conduct is reckless, culpable or irresponsible;

* introduce Income Payments Agreements (IPA) - a new way of repaying debts to creditors from the bankrupt's income;

* introduce fast track voluntary arrangements, enabling the bankruptcy order to be annulled in return for increased or speedier returns for creditors;

* remove unnecessary restrictions on bankrupts; and

* limit to three years the period in which a trustee may deal with a bankrupt's home.

Consumer Minister Gerry Sutcliffe said: "Business is a dynamic process and difficulties and failure are an inevitable part of an enterprise economy.

"However, the...

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