Credit debt alert

The Government was today accused of stoking up Britain's £1 trillion credit crisis with new laws making it easier to walk away from debt.

Financial experts and consumer groups warned reforms taking the stigma out of bankruptcy could lure consumers into more borrowing.

The law changes aim to encourage failed entrepreneurs to get back on their feet by allowing discharge from bankruptcy after 12 months instead of three years. Some bankrupts will be able to walk free of their debts within weeks.

However, there are growing fears that provisions of the 2002 Enterprise Act which come into effect today will spur further credit-card splurges.