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Insolvency

Business, Innovation and Skills written question – answered on 14th December 2011.

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Photo of Diana R. Johnson Diana R. Johnson Shadow Minister (Home Affairs)

To ask the Secretary of State for Business, Innovation and Skills

(1) what recent assessment he has made of the levels of bankruptcy tourism in the UK; and what steps he is taking to support the Insolvency Service in tackling that practice;

(2) what steps he is taking to support the Insolvency Service in introducing safeguards against abuse by foreign nationals declaring themselves bankrupt in England and Wales.

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills

Under European insolvency law, bankruptcy proceedings can only be commenced where the individual's centre of main interests lies. Where an abuse of that law is proven to have taken place and a bankrupt's centre of main interests is found not to have been in the country where the application is made, an application to annul a bankruptcy order will be made. Analysis of bankruptcy orders undertaken by the Insolvency Service in respect of England and Wales indicates that incidences of abuse of this process are extremely rare.

The Insolvency Service has already taken action in such cases and also against companies involved in encouraging individuals to make false applications to our courts.

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