Hundreds of Germans and Austrians are coming to Britain to exploit bankruptcy laws which promise to clear debts in a year, money education charity CreditAction has claimed.

??The charity said insolvent individuals from both countries have been coming to Britain to take advantage of a law stating that if a person has lived in the UK for six months, that individual can be declared bankrupt in a British court and a year later have their debts written off.

This compares to a wait of seven or even nine years in Germany.??Insolvency experts say that the number of foreign debtors seeking bankruptcy in the UK has risen by 20 per cent, with Royal Tunbridge Wells in Kent being labelled the ‘debt capital of Europe’.

CreditAction said one German debt expert based in Kent said that he was helping management consultants, doctors, accountants, dentists and lawyers to discharge their bankruptcy.??But CreditAction added that the government closely scrutinises applications from people who have been resident for less than 12 months.

In order to be considered, foreign nationals must be economically active which includes being employed or having a source of income, owning a bank account, having a national insurance number or paying rent.

During the last financial year, more than 60,000 people in England and Wales were made bankrupt but according to the Insolvency Service, Europeans account for a very small percentage of this figure.