Lessons from the Globalization of Consumer Bankruptcy

Abstract

This essay is inspired by two recent books on comparative consumer bankruptcy: (1) Consumer Bankruptcy in Global Perspective (Oxford, U.K. and Portland, Ore.: Hart Publishing, 2003, Johanna Niemi-Kiesilainen, Iain Ramsay, and William Whitford, editors), and (2) Jacob S. Ziegel, Comparative Consumer Insolvency Regimes - A Canadian Perspective (Oxford, U.K. and Portland, Ore.: Hart Publishing, 2003). After describing the worldwide legislative frenzy in the enactment of consumer bankruptcy laws since 1984, the essay turns to three basic questions. First, the paper asks - should we care about comparative consumer bankruptcy study? That is, is the comparative study of consumer bankruptcy regimes meaningful, useful, or helpful? After expressing a number of caveats, several substantial benefits of comparative bankruptcy scholarship are noted. Second, the article examines what forces are driving the global legislative surge? Here the paper points to strong evidence that the democratisation of consumer credit, stemming from deregulation and improved technology and information, has driven up the amount of consumer credit exponentially, with a correspondingly large increase in default, thus necessitating some sort of legislative response to consumer over-indebtedeness. Finally, the paper asks whether there is a global trend of convergence, whereby legislative relief for over-indebted consumers is moving towards a common set of norms. The paper suggests that while there is some evidence of convergence, the differences still are substantial, predominate, and are likely to - and should - persist.