Bankruptcy Laws Proposal to Protect Firms

Credit crunch times are hitting UK businesses hard, but the Tories have unveiled new plans to shake up current bankruptcy laws in order for companies to keep on running should they fall into financial troubles.

They are considering mirroring bankruptcy laws in the US, to create a ‘Chapter 11’ scheme. This will permit businesses to apply to court for protection from bankruptcy. The court will then look to reorganise the debts so that it can continue to trade. The court is also able to clear any of the companies debts.

Tory leader, David Cameron said: “The credit crunch has meant more companies are finding it hard to get the money they need to keep their business alive, that means one thing: more companies going into liquidation. And we all know what liquidation means: job losses.”