Bankruptcy may seem a worthwhile option for those of us who wish to clear debt within a year and start anew but many are exploiting this form of debt help.

Colin Cliff from Middlesborough decided that this would be the best option for him. He acquired a new credit card and went on a spending spree with his plastic, knowing full well that he would be unable to pay back the balance. In just twenty days, he had run up debt to the value of £13,740.

He immediately filed for bankruptcy, but to his surprise his application was loaded with bankruptcy restrictions for three years rather than the usual twelve months. The Official Receiver felt that this man had run up unnecessary debt due to ‘unreasonable extravagance’.

A woman from Birkenhead who admitted that her spending habits prior to her bankruptcy were of ‘unfit conduct’ has since received bankruptcy restrictions for the next six years.

The Official Receiver is responsible for ascertaining the reasons why bankruptcy occurs. If it is discovered that a person acted in a blameworthy or dishonest manner, restrictions will be placed upon the bankruptcy to protect creditors and serve as a lesson for others. Bankruptcy restrictions can vary in length according to an individuals circumstances ranging from two to fifteen years.

It is expected that more and more bankruptcy restrictions will be enforced over the next few months as people see insolvency as a way of easily offloading their financial baggage and starting again