PERSONAL BANKRUPTCY IN THE 21ST CENTURY: EMERGING TRENDS AND NEW CHALLENGES: Facts on the Ground and Reconciliation of Divergent Consumer Insolvency Philosophies

INTRODUCTION Comparative consumer insolvency law is the newest branch of insolvency law, and is only 25 years old. 1 Its newness is due to the fact that until the mid-1980s there was little to compare with outside the common law jurisdictions. This was because the civil law countries in continental Europe and the Scandinavian countries either did not recognize the availability of consumer bankruptcies or, if they did, did not recognize the possibility of a discharge of the consumer's debts at the end of the proceedings 2- -a critical component of meaningful relief for seriously overcommitted debtors. The leading common law jurisdictions -- the US, England, Canada, Australia -- were significantly more accommodating than their civil law cousins. Even here, however, there were hurdles to overcome on the way to reconciling major differences. Only the US had a firmly entrenched and near century-old fresh start policy and gave debtors easy access to the bankruptcy system as well as an optional Chapter 13 compositional alternative. In the other enumerated common law countries, access to the system was expensive, a powerful stigma still attached to bankruptcy, and discharge of debts was at the court's discretion and was generally only available a substantial number of years after the initial filing. The legal scene has changed dramatically since the mid-1980s. The Scandinavian countries and most of the leading civil law jurisdictions on the continent -- Germany, France, Austria, the Netherlands, Belgium and Luxembourg -- have adopted consumer insolvency or debt adjustment legislation. 3