Comparative research, more than any other tool, assists us in following the evolution of legislation in this field and the influence of more experienced countries in this development. In this chapter, we will examine differences and similarities of national regulation of consumer bankruptcy proceedings and concentrate on some of their peculiarities. Please note that this comparative chapter is based only on the results of the country surveys carried out in this study. N.B. For the purpose of this research, the term ‘bankruptcy’ will be used in relation to individuals in consistency with English legal terminology. The term ‘insolvency’ will be used as an umbrella term to address bankruptcy, debt restructuring and other types of proceedings. The origins of personal bankruptcy procedures can be found in Roman law where, in the event that a debtor was unable to return debt, he or she could have been handed to the creditor or even sold as a slave. Since then the law has become more debtor-friendly. Even if discharge (debt relief) was already understood by a number of ancient societies, in the vast majority of developed countries it was only introduced as late as the 21st century to grant overindebted debtors a possibility of a second chance or a fresh start. The causes of consumer over-indebtedness and their legal solutions are disclosed in detail in the previous chapter of this book.
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In the past decades, the growth of consumer credit has led to increased debt problems of private households, and many economically advanced countries have responded to this social risk of household over-indebtedness by creating legal procedures for the resolution of consumer insolvencies: consumer bankruptcy laws. The spread of consumer bankruptcy law has been particularly pronounced in Europe, where since the 1980s almost all countries have adopted bankruptcy laws for non-business individuals. This ‘seismic legislative activity’ alone calls for a comparative study of consumer insolvency proceedings in Europe. However, insolvency law for natural persons has not only expanded in territorial terms; it has also undergone a transformation of its basic aims and characteristics. While in the past the main objectives of personal bankruptcy law were the punishment of defaulting debtors and the (fair) distribution of an insolvent debtor’s assets among his or her creditors, the primary aim of present-day consumer bankruptcy regimes is the provision of a financial ‘fresh start’ for honest insolvent individuals by means of a discharge of debts (i.e., the legal cancellation of the debtor’s responsibility for the payment of specified types of debts). In order to account for this historical transformation of personal bankruptcy law, I have suggested incorporating the debt discharge and the possibility of a voluntary petition (i.e., debtor-initiated proceedings) into a contemporary definition of consumer bankruptcy.