LAW4528 - Comparative consumer bankruptcy

The 'democratization of credit' refers to the recent expansion in access to credit by households in the lower ranges of the distribution of income. A major policy question raised by the democratization of credit is how to adapt consumer bankruptcy law and parallel out-of-court measures to the increased incidence of over indebtedness. As the recent sub prime crisis highlights, common law systems have generally taken a laissez-faire approach and used the bankruptcy system as the primary legal remedy when debtors cannot repay their loans. This unit will deal with the approaches taken in a number of jurisdictions, including Europe and North America, to address the policy questions raised by the democratization of credit in recent years. Among the subjects considered are: out of court and formal bankruptcy procedures, consensual negotiation, creditor responsibility and the historical trajectory of regulatory approaches to over indebtedness.