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The Phenomenon of “Consumer Insolvency Tourism” and its Challenges to European Legislation


  • Thomas Hoffmann



Consumer insolvency tourism, i.e., the relocation of over-indebted natural persons into a Member State granting a more favourable discharge regime from personal debt than the home country, has been focused by media as well as by legal practitioners quite intensively lately. Conflicts arise not only in distinguishing genuine and fictional relocations of the centre of main interest (COMI), but also between the effect of discharge and creditor's perspectives who did not take into account the possibility of considerably more debtor-friendly discharge facilities abroad when issuing the credit. While relocating a corporate COMI to another Member State providing better restructuring conditions will generally benefit both creditor and debtor, the effect of discharge in consumer insolvency procedures leads to less balanced results. It is not controversial that the current practice is in accordance with the wording of the European Insolvency Regulation (EIR). However, little research has been done so far on the question whether the phenomenon itself has been endorsed by the EIR. Even if consumer insolvency tourism is generally not regarded as an abuse of the EIR or of European freedoms, it may still not respect the interests of both debtors and creditors appropriately. With regard to the prospective revision of the EIR, this paper proposes different approaches to balance the interests of debtors and creditors by normative means. Copyright Springer Science+Business Media, LLC. 2012

Suggested Citation

  • Thomas Hoffmann, 2012. "The Phenomenon of “Consumer Insolvency Tourism” and its Challenges to European Legislation," Journal of Consumer Policy, Springer, vol. 35(4), pages 461-475, December.
  • Handle: RePEc:kap:jcopol:v:35:y:2012:i:4:p:461-475 DOI: 10.1007/s10603-012-9207-8

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    References listed on IDEAS

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    6. Uwe Focht & Andreas Richter & Jörg Schiller, 2013. "Intermediation and (Mis-)Matching in Insurance Markets—Who Should Pay the Insurance Broker?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 80(2), pages 329-350, June.
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    Cited by:

    1. 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.
    2. 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.
    3. repec:ces:ifodic:v:13:y:2016:i:4:p:19191585 is not listed on IDEAS
    4. repec:ces:ifodic:v:13:y:2015:i:2:p:19166299 is not listed on IDEAS
    5. 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.


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