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Handling camera clipping gracefully

Hi !
We are working on a VR app using a Rift/Vive setup where the user can move around the world a bit. Now we have virtual characters very close to the user and quite often he/she can lean in too far so that the camera penetrates the mesh in front. Now in gaming this is easily handled by capsule collisions between the player and the world/NPCs but in VR this seems to be real tough. Is there a way to handle this gracefully? Say a shader that blurs the virtual character if it comes too close etc? Or some other effect so that the near plane clip doesnt look that bad ? Any examples ?
Thx
Sanjit

The 2 standard de-facto ways of handling this are to 1, fade the view to black as you are about to clip an object and 2, make the insides of objects black