Tougher bankruptcy rules are being backed by Midlanders in a bid to prevent people playing the system to write off their debts.
A large majority of people in the region (65 per cent) believe bankruptcy should last longer than a year, while an overwhelming majority (82 per cent) believe some take advantage of the bankruptcy system to write off debts which have been built up through reckless spending.
The findings came out of research carried out by insolvency trade body R3 and it also found two thirds (66 per cent) of West Midlanders think bankrupts should be treated differently according to their prior spending behaviour, and 67 per cent also think most people could avoid bankruptcy by reining in reckless spending.
R3 Midlands chairman Matthew Hammond, a partner at PwC in the Midlands, said a rise in “celebrity debtors” has meant many are calling for a change.
Mr Hammond said: “Our bankruptcy regime, lasting only a year, is quite lenient compared to that used in other countries.
“While no one is advocating a return to the ‘debtor’s prison’, there is a strong feeling a debtor’s spending behaviour should be factored into the length of the term of bankruptcy.
“Perhaps fuelled by stories of celebrity debtors, there is support for a move to distinguish the genuine hardship case from the reckless spender.”
R3’s findings come at a time when more than half of West Midlanders (57 per cent) are worried about their current levels of debt.
Meanwhile, around half of respondents from the region (46 per cent) said that they struggled to make it to pay day each month.
Mr Hammond added: “Those who struggle to make ends meet, perhaps using credit cards to bridge the gap, will have to make some financial sacrifices in order to avoid their debts spiralling out of control and leading to a potential bankruptcy.
“Our research also indicated a tougher bankruptcy regime would make people more cautious with their spending, although it would come too late to address today’s consumer debt problem.
“In the meantime, seeking professional advice as soon as possible is the best remedy for concerns about debt.”