The Personal Side of Harmonizing European Insolvency Law

Abstract

This article advances detailed proposals for a European Personal Insolvency Directive as part of the European Commission’s ongoing insolvency initiative. The Commission has been struggling with soft coordination of insolvency proceedings under the divergent national laws in the EU since 2000, and in 2012, it began taking steps toward substantive harmonization of these laws. A process firmly concentrated on business restructuring has recently expanded to personal insolvency writ large, including consumer debtors. On both business and personal procedures, the Commission has announced that a legislative instrument is forthcoming by the end of 2016. The process thus far, however, has involved relatively little discussion or consideration of the most salient issues unique to personal — as opposed to business — insolvency cases. This article seeks to fill that void by surveying in detail the most critical divergences in law and practice among existing European personal insolvency regimes, accentuated by several new laws adopted in 2015 and 2016. It then proposes several detailed principles and rules for harmonizing these divergent practices in light of consistent international best practice recommendations, the goals of modern personal insolvency regimes, and the goals the Commission has expressed for its initiative.