The distinction needs to be made between commercial bankruptcy, where a business goes under through 'honest failure', and personal bankruptcy, where individuals borrow and spend tens of thousands on cars, restaurants, holidays etc., with no intention of repayment - this latter is pure theft.

Dave, Newry, Northern Ireland

2006: bombarded with TV ads: Loans: borrow as much as you like. CCJ/bankruptcy/unemployed? no problem
2007: bombarded with TV ads. "snip" your debts with an IVA. Worried about debt? don't bother worrying. Don't bother paying.
2008: Banks insolvent. 100 billion in taxpayer bailout.
Connection?

Ross, Gutersloh, Germany

as Sandi remarks and the gentleman below with regards to intellectual property rights bankruptcy is not an easy option. Far from it and it ill behoves ivory tower academics to lecture people in the front line. little likelihood he will go through the pain, stress and strain that such actions involve

j, eastwood notts, uk

Like many things, "lax" bankruptcy laws bring both advantages and disadvantages. At this moment in time, when banks are faced with the prospect of lending against a falling asset (housing), it represents an added risk, which in turn will deepen and prolong the problem.

Steve, London,

Why did banks increase consumer debt exponentially over the last 10 years? What happened to prudent lending? Why do they push loans onto the financially illiterate? . Bank CEO's down to the lowliest teller have had their bonuses based on how many loans they can sell. Banks deserve no favours.

Steve, London, UK

This is just another example of 'dumbing down' by the government.

SRB, Abergele, UK

If 99% of Sandi's clients are loathe to consider bankruptcy. That mean that 1% see it as a means of subsidising a life style they could not otherwise afford?
It seems to escape this governments wit that the banks money belongs to savers and investors.

Geoff, Royton, England

Never, ever, forget that there is one group of citizens that have no possibility of taking bankruptcy lightly, the inventor or other such creative individual. They lose not only their financial status, but also their rights to their intellectual property, often a lifetimes work. Please remember that.

Chris Coles, Medstead, Alton, United Kingdom

Never thought I'd say this but well said Hewitt!
And no, I'm not a bankrupt

Phill, The Wirral, England

As I thought look at http://www.niesr.ac.uk/staff/staffdetail.php?StaffID=226 Martin Weale another academic spouting off about nothing more than theory and so called research!
Martin get in touch with the real World! The Enterprise Act helps people and businesses to restructure.

Andy Moore, Solihull,

As a money adviser, I find 99% of my clients are loath to consider bankruptcy, they do not want to even consider it as an option in most cases. Those that do consider bankruptcy do it because every other option that they have chosen has failed.

Sandi, Bradford, UK

Lending people 5 times sarary was madness.In a low inflation,low wage rise environment,what proportion of future take-home pay is required to repay a mortgage which is 5 X ones salary?

stephen hulton, eure, france

Bankruptcy rules have had little to do with the credit crunch. Banks lend on the basis that a proportion on borrowers will default. In the last few years banks have completely miscalculated risk - but never mind the tax payer is always there to bail them out.

A Harris, Kettering, UK

The headline is inaccurate, the lax bankruptcy rules haven't 'worsened' the so-called 'credit crunch'; they just allowed a lot more debt, sorry 'credit', to become available to be 'crunched'. Remember the 'credit crunch' is not the problem, it is the solution. Irresponsible lending is the problem.

Paul, Coventry,