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Consumer Insolvency: The Linkage Between the Fresh Start, Collective Proceedings, and the Access to Debt Adjustment


  • Tuula Linna



The term “fresh start” is widely used. This article asks how fresh the start needs to be in order to offer real rehabilitation to the debtor. A fresh start where the debtor does not restore the control of his or her economic situation has not achieved the objective of debt adjustment. Sometimes, however, the poor economic situation of the debtor after debt adjustment is not a sign of unsuccessful insolvency legislation but a consequence of more general social policy problems in society. In this paper, the hypothesis is set that the fresh start requires quite extensive and simultaneous discharge of debts in collective proceedings. The collectivity of the proceedings is the procedural side of the coverage of the debts. A high coverage of debts means usually a strict entry control by the court as a gatekeeper. The court investigates the reasons behind the indebtedness. The downside of strict control is the drastic sorting out of the debtors. A relatively open assess to debt adjustment is possible in systems where plenty of debts have been excluded from debt adjustment by the legislator (protected debts). The weak point of these systems is that the fresh start is not achieved because the debtor has not enough disposable income to pay the protected debts. In this paper, a debt adjustment model is suggested that has high coverage of debts where rescheduling is used as a means of debt arrangement concerning the protected debts. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • 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.
  • Handle: RePEc:kap:jcopol:v:38:y:2015:i:3:p:357-374
    DOI: 10.1007/s10603-015-9287-3

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    References listed on IDEAS

    1. Johanna Niemi, 2012. "Consumer Insolvency in the European Legal Context," Journal of Consumer Policy, Springer, vol. 35(4), pages 443-459, December.
    2. 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.
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