A reduction of the time people spend in bankruptcy has not encouraged more to declare themselves insolvent, a report said yesterday.
Under reforms introduced by the Enterprise Act in April 2004, the length of time it takes for a bankrupt to be discharged was reduced from three years to just one year, sparking concerns that this could make bankruptcy appear to be a soft option.
But research carried out for the Insolvency Service found that the changes appeared to have had very little impact on people's decisions about bankruptcy, with most feeling they had few, if any, practical alternatives.
The report, produced by John Tribe of the Centre for Insolvency Law and Policy at Kingston University, said 16 per cent of people blamed their problems on business failure and 35 per cent attributed them to other causes, such as illness, redundancy or relationship breakdown.
The number of people going bankrupt soared to its highest level since records began during the third quarter of 2005, with more than 12,000 people in England and Wales going through the process - nearly a third more than during the same period of the previous year.
Desmond Flynn, the inspector general and chief executive of the Insolvency Service, said: "The report concludes that few see bankruptcy as an easy way out."