One-year bankruptcy rule change to end debt ‘punishment’

Bankruptcy applications are expected to soar after new rules came into effect reducing to as little as a year the period that employment and credit restrictions apply to bankrupt individuals.

The changes, which see the bankruptcy term reduced to just a fraction of the 12 years which applied up to 2013, were described as “revolutionary” and a “fundamental shift in attitudes towards indebtedness”.

Under the Bankruptcy (Amendment) Act, people declared bankrupt will have their assets sorted, sold, or returned to them, and be free to resume normal business and financial dealings after a year instead of enduring years of wrangling with creditors.