Consumer Bankruptcy Regimes In Europe (original) (raw)
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Consumer bankruptcy in Europe: different paths for debtors and creditors
Appropriate laws and regulations can avoid over-indebtedness and provide a way-out, helping households to see light at the end of the tunnel, while at the same time being fair to creditors and discouraging for people from over-committing themselves again. Nevertheless, actual implementation of legal consumer bankruptcy and debt settlement procedures can be costly and tends to be an unpleasant experience with often unsatisfactory outcomes for creditors, debtors and tax-payers alike. Here is where quality social services can play an important role, with effective counselling and informal agreements potentially preventing or facilitating legal procedures. This discussion paper aims to stimulate dialogue between the legal and social policy-making spheres. As a start, we investigate the impact of the crisis on the prevalence of over-indebtedness. Next, we discuss the nature of social services for the over-indebted in the EU. The need for a multi-faceted but integrated response is stressed, with well-balanced, customized attention to legal, welfare, financial, health and social aspects of the problem. The paper looks to connect the institutional environment with such integrated service provision, tentatively exploring how current institutional dilemmas could be addressed with social service provision. Finally, some conclusions are drawn, in the context of Eurofound’s 2011 project on quality service provision in managing household debts.
Business Law Review, 2016
This is the first part of a two-part article which compares and analyses the regulatory framework addressing consumer overindebtedness in four EU Member States against the policy and law of the European Union. It aims to capture the preventive and the curative measures against overindebtedness in the selected Member States to assess the impact that EU policy and law is having on the internal market and effectively tackle a problem that affects millions of European consumers. Part I first provides the background of EU law and policies, then it investigates the legal framework in the UK and in Germany. In the forthcoming issue, Part II will explore Italy and Greece. It will conclude with a comparative analysis outlining shortcomings and best practices.
Social Exclusion in European Consumer Bankruptcy Systems
In the past decades the growth of consumer credit has led to increased debt problems of private households, and many advanced economies have responded to this new social risk of consumer over-indebtedness by adopting consumer bankruptcy laws that enable insolvent individuals a financial ‘fresh start’ via discharge of debts. This paper discusses consumer bankruptcy as social policy in finance-driven capitalism, classifies the consumer bankruptcy systems of fifteen advanced economies, and examines the problem of social exclusion in European consumer bankruptcy systems. Three main points are made: First, two approaches to consumer bankruptcy in Western Europe can be discerned, a ‘Germanic’ liability model emphasizing the debtor’s responsibility for debt payment, and a ‘Franco-Scandinavian’ mercy model focusing on the debtor’s deservingness for debt relief. Second, both approaches exclude a considerable share of insolvent individuals from a ‘fresh start’, but they differ regarding their normative foundations, mechanisms of exclusion, and types of debtors excluded. Third, exclusion of over-indebted households harms debtors and societies, and it can be tackled by strengthening consumer bankruptcy’s function of regulating the credit market, not by bringing welfare policies into consumer debt relief.
Comparative Consumer Bankruptcy
This article discusses comparative consumer bankruptcy in the context of the international spread of consumer credit capitalism and its accompanying social cost, overindebtedness. The article outlines the contours of regulation of credit markets and overindebtedness within Europe, the influence of the U.S. idea of the "fresh start" on recent changes in European debt-adjustment laws and continuing contrasts with the U.S. approach to bankruptcy. As consumer debt increases in Europe and elsewhere, these differences between continental European and North American approaches to bankruptcy might be explained by the path-dependence of legal institutions, cultural differences, or the political influence of interest groups. The article is skeptical about cultural explanations of difference and suggests the value of an analysis that is sensitive to political economy and history. It also argues that future comparative research should focus on overindebtedness rather than bankruptcy.
Changing Policy Paradigms of EU Consumer Credit and Debt Regulation
1 This paper relates to a research project "Personal Insolvency in an Age of Austerity" funded by a Leverhulme Trust research fellowship. Thanks to Maria Gomes for research assistance and Toni Williams and participants at the Oxford conference for comments on an earlier draft.
Models of Consumer Bankruptcy: Implications for Research and Policy
Journal of Consumer Policy, 1997
The author explores three models of individual bankruptcy law which might provide some guidance for analysing policy and for posing further research questions in relation to bankruptcy as a legal and social institution. The models are: (1) Bankruptcy law as a response to deviant behaviour; (2) Bankruptcy as consumer protection; (3) Bankruptcy as social welfare law. Some tentative thoughts are also offered on the comparative analysis of consumer bankruptcy as a focus for understanding relationships between legal and social norms.
The Over-Indebtedness of European Consumers A View from Six Countries
SSRN Electronic Journal, 2000
A 60 month European Research Council grant has been awarded to Prof. Hans-Wolfgang Micklitz for the project "European Regulatory Private Law: the Transformation of European Private Law from Autonomy to Functionalism in Competition and Regulation" (ERPL). The focus of the socio-legal project lies in the search for a normative model which could shape a selfsufficient European private legal order in its interaction with national private law systems. The project aims at a new-orientation of the structures and methods of European private law based on its transformation from autonomy to functionalism in competition and regulation. It suggests the emergence of a self-sufficient European private law, composed of three different layers (1) the sectorial substance of ERPL, (2) the general principlesprovisionally termed competitive contract lawand (3) common principles of civil law. It elaborates on the interaction between ERPL and national private law systems around four normative models: (1) intrusion and substitution, (2) conflict and resistance, (3) hybridisation and (4) convergence. It analyses the new order of values, enshrined in the concept of access justice (Zugangsgerechtigkeit).
Advantages and disadvantages of German consumer bankruptcy model:Guidelines for Croatian lawmaker
Ekonomski Vjesnik Econviews Review of Contemporary Business Entrepreneurship and Economic Issues, 2014
Legal transplant, as a legal phenomenon, has always been present in legal history, and was especially brought to the fore in terms of creating major economic integrations, such as the European Union (EU). Membership of the Republic of Croatia in the EU has its strong legal basis because it belongs to the continental law school initially based on the reception of Roman law, and later German law. The Croatian academic community believes that the harmonization of bankruptcy and legal regulations with the EU laws is not a goal in itself, but has a strong economic rationale. In this context, a number of ambiguities in the current bankruptcy legislation are indicated, one of them being the absence of lex specialis regulations for consumer bankruptcy. As the legislator showed an initiative for the reception of a model of consumer bankruptcy (the