The Enterprise Act 2002 ensures that responsible businesses that declare bankruptcy and those that have declared bankruptcy through recklessness are treated differently.
If a business has declared bankruptcy but they haven't been reckless, The Enterprise Act 2002 says they are eligible for a "Fresh Start". This fresh start will have them co-operate with an official receiver and they could be debt and restriction free in a short period of time.
On the other hand, reckless bankrupts will face tougher challenges through the Enterprise Act 2002 as a result of their behaviour. Their restrictions last longer than others.
Changes to the Enterprise Act 2002
Recently, changes have been made to the Enterprise Act 2002.
Though the minimum time before responsible businesses could be released from bankruptcy was two years, in some cases it could now be as short as one year.
The Enterprise Act 2002 says a Trustee could now only have three years to gather any equity from a home. That used to be open-ended.
The Enterprise Act 2002 now puts harsher penalties on those who are considered to have brought about their own bankruptcy through irresponsible behaviour. Their restrictions could last between two and 15 years.
Acts to protect debtors
Both the Enterprise Act 2002 and the Administration of Justice Act 1970 are set in place to recognise the rights of debtors.
They also set reasonable restrictions and expectations for creditors. Creditors and debtors don't have to be against one another.
With information from Legal Advice Helpline you can learn to manage your debts responsibly and in a way that's best for you. Call Legal Advice Helpline on 0800 612 3042.