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


  • Iain Ramsay



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. Copyright Springer Science+Business Media, LLC. 2012

Suggested Citation

  • Iain Ramsay, 2012. "Between Neo-Liberalism and the Social Market: Approaches to Debt Adjustment and Consumer Insolvency in the EU," Journal of Consumer Policy, Springer, vol. 35(4), pages 421-441, December.
  • Handle: RePEc:kap:jcopol:v:35:y:2012:i:4:p:421-441
    DOI: 10.1007/s10603-012-9210-0

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    References listed on IDEAS

    1. John Armour & Douglas Cumming, 2008. "Bankruptcy Law and Entrepreneurship," American Law and Economics Review, Oxford University Press, vol. 10(2), pages 303-350.
    2. Igor Livshits & James MacGee & Michèle Tertilt, 2010. "Accounting for the Rise in Consumer Bankruptcies," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 165-193, April.
    3. Jérôme Sgard, 2006. "Do legal origins matter? The case of bankruptcy laws in Europe 1808–1914," Sciences Po publications info:hdl:2441/6824, Sciences Po.
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    5. repec:spo:wpecon:info:hdl:2441/6824 is not listed on IDEAS
    6. Igor Livshits & James MacGee & Michèle Tertilt, 2007. "Consumer Bankruptcy: A Fresh Start," American Economic Review, American Economic Association, vol. 97(1), pages 402-418, March.
    7. David B. Gross, 2002. "An Empirical Analysis of Personal Bankruptcy and Delinquency," Review of Financial Studies, Society for Financial Studies, vol. 15(1), pages 319-347, March.
    8. Adler, Barry & Polak, Ben & Schwartz, Alan, 2000. "Regulating Consumer Bankruptcy: A Theoretical Inquiry," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 585-613, June.
    9. Aldo Barba & Massimo Pivetti, 2009. "Rising household debt: Its causes and macroeconomic implications--a long-period analysis," Cambridge Journal of Economics, Oxford University Press, vol. 33(1), pages 113-137, January.
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    Cited by:

    1. Marcus Drometer & Katrin Oesingmann, 2015. "Household Debt and the Importance of Effective Private Insolvency Laws," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(2), pages 63-66, 08.
    2. Teresa Buchen & Marcus Drometer & Katrin Oesingmann & Timo Wollmershäuser, 2016. "Managing Household Debt in Croatia," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(1), pages 12-16, April.
    3. Michel Robe & Eva Maria Steiger, 2016. "Insolvency and its Consequences: A Historical Perspective," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(4), pages 35-40, 02.
    4. Tuula Linna, 2015. "Consumer Insolvency: The Linkage Between the Fresh Start, Collective Proceedings, and the Access to Debt Adjustment," Journal of Consumer Policy, Springer, vol. 38(3), pages 357-374, September.
    5. repec:ces:ifodic:v:13:y:2016:i:4:p:19191585 is not listed on IDEAS
    6. repec:ces:ifodic:v:13:y:2015:i:2:p:19166299 is not listed on IDEAS


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