Establishment and development of state and legal mechanisms to prevent bankruptcy: domestic and foreign experience

Abstract

This article analyzes the historical development of the institution of bankruptcy, highlights its evolutionary changes in the context of the general principles of humanism. It is noted that in the past bankruptcy was considered a serious crime, but in the 19th century a transformation of approaches was observed, where harsh sanctions gave way to the humanization of society. Changes in modern trends are considered, pointing to the rejection of the separation of bankruptcy systems and emphasizing the concept of an effective system of insolvency law and bankruptcy prevention. The article is aimed at a retrospective analysis and highlighting of key aspects of the evolution of the bankruptcy institution with an emphasis on the transition from a punitive to a compensatory concept and the importance of preventive measures. The period from the Middle Ages to the beginning of the 20th century was considered. The norms and legislative acts of France, Germany, and Italy are analyzed, highlighting the variety of approaches to determining the insolvency and responsibility of debtors. In particular, the laws issued in the 16th century, which for the first time distinguished between unfortunate and malicious insolvency, are examined. An important stage is the analysis of the period of bankruptcy law reforms in the 19th century, when a change in the direction of legislation on business preservation and social protection of employees of debtor enterprises is noted. The article also notes reforms in French and German legislation aimed at balancing liquidation and rehabilitation procedures. The general conclusion is that the history of bankruptcy is closely related to the social organization of the country and the financial challenges of its era.