Bankruptcy maybe a ruinous experience. Yet there are loopholes bankrupts exploit, when taking to crime (Ex-banker found liable for $6.5m claimed by former client; Jan 3).
It is an open secret thatbankrupts can bilk a victim and not make restitution, as the law prohibits payments in damages to a victim of a scam perpetrated by a bankrupt.
Bankrupts subconsciously know that if they are placed in jail, their creditors will be deprived of payments due to them.
Thus, a jail term for a bankrupt is highly unlikely because he or she knows of the dilemma creditors will be under if the debtor winds up in jail.
There have even been instances of bankrupts taking to insolvency trading and becoming investment brokers - acts that are clearly prohibited in other jurisdictions.
The time has come to revisit and review the law.