Between Neo-Liberalism and the Social Market: Approaches to Debt Adjustment and Consumer Insolvency in the EU

Abstract

Many EU countries introduced debt adjustment systems as a response to the growth of over-indebtedness since the 1980s. These systems, originally introduced in many countries as crisis measures, have now become normalized, metamorphosing through a continuing learning process into a combination of debt adjustment and insolvency relief through a discharge of debt, sometimes after only 1 year, but often after a debt repayment plan over a period of 3–7 years. Since the early 2000s, new Member States of the EU have also introduced insolvency systems, often based on models from the old states. This paper examines experience in European consumer insolvency systems, based on the modest empirical studies of existing systems, primarily England, France and Germany. It discusses the reasons for the use of consumer insolvency, and the limited data on the characteristics of users, charts distinct national approaches and outlines common themes and objectives for consumer insolvency in the context of EU measures to create an integrated credit market in a “competitive social market. To economy”. It concludes by underlining the absence of systematic social science knowledge on existing systems and outlines areas for further research.