TOWARDS AN INTERNATIONAL PARADI GM OF PERSONAL INSOLVENCY LAW? A CRITICAL VIEW

This article analyses three issues related to the global spread of personal insolvency laws. First, it outlines the emergence of an international paradigm on personal insolvency law and its central feature of a policy preference for partial repayment alternatives as the norm with residual immediate relief reserved for the deserving poor debtor. Second, it examines critically this paradigm in the light of existing empirical studies of the extent to which personal insolvency law achieves economic and social objectives associated with the fresh start such as financial inclusion. The mixed empirical findings on the success of personal insolvency law in achieving these objectives, particularly for individuals subject to instability of employment or poverty raises further questions about the role of personal insolvency law as a modestly progressive safety net for overindebtedness. The final section of the article considers therefore recent radical theories of consumer credit in contemporary capitalism which conceptualise credit as exploitative and personal insolvency law as a disciplinary and legitimating institution which individualises default and may neutralise collective responses to debt and its wider causes such as limited public support or provision. The article concludes by outlining how these radical insights might contribute to future socio-legal research on personal insolvency law.


INTRODUCTION
Personal insolvency law became more significant after the Great Recession of 2008 when international institutions identified household debt as a potential systemic risk for the international financial system. 1 The subsequent Eurozone crisis accelerated insolvency law reforms within the European Union ('EU'), which proposed a directive on insolvency and restructuring law in 2016. 2 Emerging economies have also introduced or reformed personal Towards an International Paradigm of Personal Insolvency Law?A Critical View QUT Law Review 17 (1), October 2017 | 17 more careful screening of those wishing to file for insolvency, or better social and economic policies to address directly the problems associated with insolvency such as job insecurity or limited health coverage. 11Bankruptcy research functions in this last case as the 'canary in the mine', identifying wider problems in society. 12e gap identified between the promise and reality of the 'fresh start' leads to my final topic, reflection on the role of personal insolvency in contemporary capitalism.A conventional view is that the fresh start in bankruptcy is a modestly progressive safety net for addressing overindebtedness.Certainly, this assumption underlies the emerging paradigm and much contemporary research on personal insolvency law.Since the Great Recession, theoretical writing on the role of credit and debt in capitalism has mushroomed. 13A few writers 14 have reconceptualised bankruptcy as a disciplinary and legitimating device in a contemporary capitalism defined by debt.Bankruptcy law mediates the contradictions between the imperatives of a contemporary capitalism defined by credit-led accumulation and the inevitable problems of non-repayment for certain groups in society. 15This perspective challenges the progressive assumptions about insolvency law, and I examine briefly the significance of this perspective for future research on personal insolvency.

II
AN EMERGING INTERNATIONAL PARADIGM? 16policy paradigm represents a framework of ideas on the goals of a policy, the instruments that can be used to attain the goals and the nature of the problem at issue. 17In the area of corporate insolvency law, 18 an international paradigm 19 has emerged since the Asian financial crisis of the late 1990s, when a modified Anglo-American 'rescue culture' was internationalised as part of the international financial architecture of economic development.This order is embedded in the United Nations Commission on International Trade Law ('UNCITRAL') legislative guide on insolvency, providing best practices for assessing a state's insolvency law, and functioning as part of structural adjustment programmes under loan conditionality.In contrast, personal insolvency was viewed historically as not significant internationally in terms of the international financial architecture.Along with the topic of overindebtedness it raised social, cultural and political issues which were best left to individual states. 20Until the 1990s, many industrialised nations had noor limitedpersonal insolvency systems which provided a discharge of debts.Where discharge was available it was usually limited to traders. 21However, developments in Europe and elsewhere since the recession of the early 1990s and the subsequent Great Recession of 2008 suggest the contours of an emerging paradigm of personal insolvency.
A policy paradigm assumes agreement on the nature of the problem at issue.The immediate problem addressed by personal insolvency is that of over-indebtedness, but disagreement has existed as to whether factors such as unemployment or individual behaviour through overspending are the primary causes of over-indebtedness. 22The EU Commission identifies over-indebtedness mostly with unemployment, divorce and illness, 23 while a recent Bank of France study indicates a 'conjuncture of events' as the primary reason (see Table 1).The Insolvency Service in England and Wales identifies both exogenous and individual causes for insolvency (Table 2).These official statistics on reasons for bankruptcy are important politically because they suggest the nature of a policy response, contribute to ongoing political debates, and shape dominant narratives about the nature of failure.However, the limits of the categorisations in these data and their partial construction of the social reality of overindebtedness mean that they should be treated with caution. 24 22 Resulting in significant differences between systems for example in relation to access criteria, institutional frameworks, time to discharge and discharge exceptions. 23European Commission, above n 2, 4. 24 I discuss the limits of statistics on reasons for bankruptcy and the various research studies on causes of personal insolvency further in Ramsay, above n 16, 16-24.After the Great Recession, writers linked individual debt problems to macroeconomic issues. 25he policy problem now was that significant numbers of over-indebted individuals created a debt overhang and acted as a drag on economic growth.One response was therefore the provision of access to a swift deleveraging of debt.This swift deleveraging narrative was, as I will argue in the next section, initially adopted by the International Monetary Fund ('IMF'), but ran into headwinds in its application within the EU.This debate over the nature of the problem of individual failure to repay suggests that laws will continue attempting to balance debt relief with provisions intended to address moral hazard and individual behaviour.
The goals of individual insolvency policy are encapsulated in the idea of the fresh start but the concept of the fresh start is ambiguous, even in a country sometimes regarded as its source, the US.A fresh start may simply mean being free from the burden of existing debt, but might also include ideas of financial and social reintegration. 26Promoting entrepreneurialism through a swift fresh start has become an influential idea.Several European states, such as Germany and the Netherlands, promoted social reintegration through the use of independent debt counselling agencies as the primary intermediaries.Individual counselling provided a substitute for rollbacks in welfare provision. 27Although counselling could be justified in terms of an enabling welfare state which would help individuals to participate again in the labour market rather than receive cash transfers, the limited funding for counselling and patchy national 25 See Atif Mian and Amir Sufi, House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent it from Happening Again (University of Chicago Press, 2015). 26See eg discussion in Margaret Howard, 'A Theory of Discharge in Consumer Bankruptcy' (1987) 48 Ohio State Law Journal 1047, 1069, where Howard concluded that 'discharge in the context of non-tort claims should have only one goalto restore the debtor to economic productivity and viable participation in the open credit economy.This standard calls for making discharge broadly available, since viable economic participation is restored by lifting the burden of impossible debt.No one advocates discharge on demand, however.Thus, some limitation is necessary...'. 27 coverage, as in Sweden, undercut its potential effectiveness. 28In contrast, the US and Canada now mandate financial counselling for bankrupts, based partly on a perception that individual financial mismanagement leads to insolvency, as well as the political influence of financial institutions.The EU Directive highlights the economic benefits for investment, lending and promoting consumer demand through a swift discharge. 29It focuses on the economic rather than social benefits of the fresh start.
Repayment plans with residual immediate relief for the deserving poor represent the preferred instruments for achieving the fresh start while addressing concerns about moral hazard.This represents the most solid aspect of the paradigm.We noted this trend in 2009. 30It is certainly the continental European model.The development of debt adjustment systems in Europe, often introduced by conservative governments in the 1990s represented an adjustment to a more neoliberal model of the role of the market and social provision. 31European studies and soft law initiatives during this period outlined an optimal policy for personal insolvency, partly inspired by Chapter 13 of the US Bankruptcy Code. 32It included the idea of a moratorium or stay, a realistic payment plan, usually no more than four years subject to majority approval by creditors, adequate exemptions determined by member states, professional debt counsellors acting as advisers and administrators, financing partly by creditor levies, with immediate discharge for the hopelessly indebted.By 2009, Jason Kilborn argued that European policymakers were converging on a 'unitary paradigm of consumer insolvency treatment' involving less demanding repayment plans and greater possibilities for the residual discharge of debts. 33These developments reflect partly a social learning process concerning the fact that many individuals had little payment capacity, and partly state concerns about the public costs of processing debtors.For example, the introduction of the English NINA procedure was driven by a desire to minimise court and government processing costs.
A significant ambiguity in the scope of the paradigm concerns its application to both individual consumers and traders, and whether traders should have a swifter period of discharge than consumers.The promotion of entrepreneurialism through a liberal discharge procedure is an integral aspect of the emerging international paradigm.The EU Directive of 2016 proposes a maximum three-year discharge period for the honest entrepreneur as part of wider policies to enhance entrepreneurialism in the EU, with the possibility of applying this period to consumers. 34In Britain, the new Labour government at the beginning of the century embraced entrepreneurialism in the 2002 liberalisation of the English discharge procedure. 35The shortening of the discharge period in Germany from six to three years in 2014 for individuals able to pay a portion of their debts is also intended to promote entrepreneurialism. 36Some European countries have recently introduced special provisions to make it easier for entrepreneurs to fail (Sweden, France, Spain).Australia recommends liberalisation of the discharge process to promote entrepreneurialism. 37nsumers, the self-employed and small businesses represent overlapping categories of debtors.Many self-employed individuals use personal credit cards to finance their business and mortgage the family home to support a business.In the 'gig economy', with workers no longer employed in traditional 9-5 jobs, 38 the self-employed are little different from employees.Moreover, consumers are, like businesses, encouraged to be responsible risk takers, investing in education or training, and managing their financial future in an increasingly financialised culture. 39The concept of the individual as an 'entrepreneur of the self' managing one's human capital erodes distinctions between the entrepreneur and the consumer.40

A International Institutions and the Emerging Paradigm
International institutions have contributed to the development of the contemporary paradigm since the Great Recession.The IMF promoted in some documents the importance of a swift deleveraging of household debt in the wake of the crisis, arguing that such measures would benefit primarily those with a higher propensity to consume (average to lower income consumers) and thus drive a recovery. 41However this 'swift deleveraging' approach received more muted support in the actual work of the IMF in Europe after the Eurozone crisis, suggesting political resistance by states and other actors such as the European Central Bank.
An IMF working paper in 2013 argued from cross-country experience that reforms should provide a fresh start for 'financially responsible' individuals, typically after three to five years.It also proposed a swift 'no income no asset procedure' for those with no repayment capacity. 42his latter procedure recognises the limits of existing European repayment systems where significant numbers of individuals have no repayment capacity and may be unable to pay for accessing the insolvency system in those countries which impose a fee. 43The idea of a special NINA procedure originated in New Zealand and was implemented in England and Wales in 2009.Writers appeal to this idea as a model for US bankruptcy simplification. 44The English model is a means-tested administrative procedure involving an online application to the Insolvency Service through a limited number of primarily publicly subsidised 45 'approved intermediaries', 46 who act as screening agencies checking the eligibility of the debtor. 47The order can be used every six years.A debtor must inform the Insolvency Service of any change in her or his financial status (for example, increase in income) during the one-year period. 48he use of the term 'Debt Relief' rather than bankruptcy is intended to avoid the stigma of bankruptcy, which might deter some applicants. 49The objectives of the procedure are to 42 . 47 Access is limited to individuals with non-exempt assets below £1000, a vehicle valued at less than £1000, unsecured debts less than £20 000, and no more than £50 in surplus income, based on a formula tracking reasonable expenditures of individuals in the bottom income quintile.Data indicate that about 1 per cent of applications are rejected by the Insolvency Service with further information requested in about 5 per cent of cases.Individuals must pay for the service (£90) with £10 going to the approved intermediary.Access is barred to individuals who have entered into a transaction at an undervalue or given a preference within the previous two years, and debtor behaviour can be sanctioned through a DRO restriction order.A restriction order may be made either through the court, or an undertaking by the debtor to the Insolvency Service.A broad discretion exists to make such an order where it is appropriately structured by a list of factors such as 'incurring, before the date of the determination of the application for the [DRO], a debt which the debtor had no reasonable expectation of being able to pay': see Insolvency Act 1986, sch 4ZB(2)(h). 48Insolvency Act 1986, s 251J(5). 49This description was proposed in a 2004 research paper on administration orders where the authors noted that 'some of the people we interviewed were very resistant to the idea of bankruptcy, and were deterred by the stigma provide debt relief for those who are unable to pay the costs of accessing bankruptcy (approximately £700) and to prevent financial exclusion. 50 2013, the World Bank, after recognising the international significance of consumer insolvency in 2011, 51 published a Report on the Treatment of the Insolvency of Natural Persons.52 This document did not outline best practices, 53 but recognised the dominance internationally of payment plans as a condition of relief.54 It was implicitly critical of long repayment plans imposed on individuals with no repayment capacity as in Germany (six years) and Sweden (five years).Although individuals may be given a 'zero repayment plan' in these jurisdictions, they are not discharged until the end of the plan.The World Bank report, like the IMF, also highlighted the problem of the NINA debtor, the individual with no assets or repayment capacity or resources to pay for insolvency. Geman studies suggest that 80 per cent of debtors on plans are nullinsolvenz, that is, they have no capacity to make repayments over the six-year waiting period.55 In Sweden, approximately 40 per cent of debtors on the five-year restructuring plans have no repayment capacity.56 Figure 1 shows the rise in France of rétablissement personnel, providing an immediate discharge to individuals with no likelihood of repaying their debts.The World Bank Report also recognised the issue of moral hazard in a bankruptcy system, but concluded that there was a danger that focus on this issue could they would face given the relatively small sums of money they owed … A simplified debt procedure would therefore seem more appropriate for people on very low incomes that are unlikely to increase.This could be called something other than bankruptcy, to overcome the stigma that people feel, and differentiate it from the full bankruptcy procedure. '  51 See, Block-Lieb, above n 1, [17] '[R]ecent events suggest that the expansion of access to finance, the extension of modern modes of financial intermediation, and the mobility and globalization of financial flows may have changed the character and scale of the risk of consumer insolvency in similar ways in many different economies'. 52See, World Bank, Report on the Treatment of the Insolvency of Natural Persons (2013).This was the work of a small group of academics, (the author was a member of the drafting committee, chaired by Jason Kilborn), within the context of a World Bank Task Force comprised of lawyers, government representatives, academics, judges (primarily US bankruptcy judges), and representatives of UNCITRAL.53 The reasons were the potential diversity of cultural, and social issues associated with personal insolvency.World Bank above n 52, [12]. Whle these reasons have some weight, the approach taken by the Report was also driven by political factors.The Bank wished to publish a report quickly, and any attempt to state best practices might result in the project being taken over by UNCITRAL.overshadow the many benefits of debt relief, and existing evidence did not suggest moral hazard was a significant problem.57 It might be argued that Anglo-Saxon systems do not fit the paradigm of a preference for repayment plans, given the historic role of straight bankruptcy providing a bankruptcy discharge without the necessity of an income repayment order.Moreover, individuals in Anglo systems may choose their insolvency solution, whereas states such as Germany impose a standard solution on debtors.These differences might suggest the persistence of legal origins in creating difference.58 However, common law systems have witnessed the rise of formal repayment alternatives, for example the Individual Voluntary Arrangement ('IVA') in England and Wales (Figure 2) promoted by entrepreneurial debt intermediaries, the consumer proposal in Canada (see Figure 3), 59 or the debt settlement arrangement in Australia (Figure 4).The UK, Canada and Australia have also introduced 'surplus income' requirements so that individuals may be making payments for up to three years after they are discharged.Even in the US, the non-dischargeability of significant debts such as student loans and the use of reaffirmation agreements mean that individuals may continue to repay debts notwithstanding the discharge.60 US legislators have historically demonstrated a preference for Chapter 13, the partial repayment alternative, as the primary remedy for consumer debtors at least since the Bankruptcy Reform Act 1978, even if in practice this preference was frustrated by debtor choice and the reality of debtors' circumstances.61 In the UK, government as well as insolvency professionals share a master narrative of 'can pay should pay'.The major professional body, R3, is lobbying for an extension of the standard bankruptcy discharge period to three years, with a swift discharge reserved for the deserving poor under the Debt Relief Order ('DRO').62 Straight bankruptcy is a suppressed political alternative 63 for debtors in the UK.60 The US Supreme Court noted that the 2005 amendments were based on an ideology of 'can pay, should pay'.This emerging paradigm of the primacy of repayment plans assumes that such an approach is economically and socially beneficial and in Part III, below, I examine existing empirical studies on the effectiveness of existing personal insolvency systems in achieving a fresh start.As a preliminary, one characteristic is the increasing length of plans in common law jurisdictions.Thirty years ago, conventional wisdom was that a plan in excess of three years would often fail, 64 but plans are now written for five years or more as in the case of the IVA.65 It is not clear whether this is economically or socially beneficial.66 Completion rates of repayment plans raise concerns, 67 and the absence of any repayments by many debtors on plans in countries such as Sweden and Germany suggest the need for a swift discharge for many debtors.Constructing the NINA process as a residual programme does not seem to fit the reality of these systems where substantial numbers of debtors seem to have no repayment capacity.Braucher, surveying studies of repayment alternatives in North America, Australia and Europe in 2009 concluded that existing data, while 'spotty' suggested that these alternatives had high costs in relation to debt repayment and 'significant rates of failure to achieve a discharge'.68 Almost no knowledge existed on whether repayment plans were effective treatments for over-indebtedness or simply left 'many debtors struggling financially and perhaps in other ways too'.69 In many countries this question remains unanswered.

III CONTEMPORARY EMPIRICAL RESEARCH ON THE 'FRESH START'
The 'fresh start' is a central objective of personal insolvency law in many countries.The absence of significant assets in most individual bankruptcies undercuts the significance of the traditional bankruptcy objective of equitable distribution of assets among creditors.The World Bank outlines several objectives associated with the fresh start: encouraging entrepreneurialism; increased productivity; promoting financial and social inclusion; reducing health and welfare costs; encouraging responsible lending; and maximising economic activity. 70The EU Commission identifies 'reduced consumption, labour activity and foregone growth opportunities' with over-indebtedness, arguing that shorter discharge periods will case, a debt adviser failed to correct a debtor's misconception about the effects of bankruptcy and recommended a debt management plan lasting 125 years!Firms often had incentive structures for selling debt solutions. 64The Cork Committee concluded in 1982 that the maximum duration of the proposed Debts Arrangement Order should be three years since 'it is clear from the Judicial statistics relating to administration orders that debtors are unlikely to maintain the discipline of instalment payments over periods in excess of three years and we therefore recommend this period as the norm': Insolvency Law Review Committee (UK), (Cork Committee), Insolvency Law and Practice: Report, Cmnd 8558 (1982) [313].
permit consumers to re-enter the 'cycle of consumption'. 71Given these objectives, the task of research must be to determine whether existing systems achieve them.At the outset, it must be stated that this is a challenging research question.Bankrupts are a difficult group to study, and longitudinal data requires following individuals over a reasonable period of time.Moreover, in order to draw firm conclusions about the effect of personal insolvency law, one should ideally have a control group of similarly situated individuals who have not experienced insolvency.
The US tradition of the liberal 'fresh start' is an obvious site for testing the effectiveness of the fresh start.Several US studies question the efficacy of the existing fresh start under both Chapter 7 and Chapter 13.Porter and Thorne found that one year after bankruptcy filing, 25 per cent of Chapter 7 bankrupts were struggling to pay routine bills and 33 per cent had a similar financial situation to that when they filed bankruptcy. 72They noted that the Brookings Institution had reached a similar conclusion in their study of bankrupts in the mid-1960s.A key factor differentiating those in continuing financial difficulties from other bankrupts was the absence of an adequate and steady income. 73A bankruptcy discharge did not solve this problem, because employers might not hire an individual who had filed for bankruptcy notwithstanding the prohibition in bankruptcy law on discrimination against bankrupts.Thus, although bankruptcy seemed to provide a fresh start for the majority of bankrupts, Porter and Thorne concluded that for others it was a 'temporary refuge' from continuing income problems. 74her studies suggest that bankrupts may continue to suffer financially for a substantial period after bankruptcy.Zagorsky and Lupicka concluded on the basis of a comparative study of filers and non-filers that for filers it 'took many years to restore financial well-being'. 75Han and Li concluded that bankrupts have less access to unsecured credit such as credit cards after bankruptcy and were more likely than other consumers to use expensive credit sources.Although this high cost did reduce over time, filers were still more prone to face financial hardship ten years after filing. 76They concluded that 'for many bankrupt households, debt discharge alone failed to provide a long-run improvement in their financial health'. 77More recent research suggests that the seven and 10-year bankruptcy 'flags' on a credit file had a substantial impact on credit availability, with increases in credit scores and credit balances after the flags were lifted. 78 is often assumed that debtors do not obtain credit after bankruptcy because of the limits of available credit supply.Porter questions this conventional wisdom, citing studies which demonstrate that a significant credit market exists, targeting recently discharged bankrupts.She concludes that many debtors who have experienced bankruptcy do not borrow on credit cards because of the painful experience of bankruptcy. 79This undermines the fresh start objective of facilitating re-entry to the credit market.
Empirical studies of Chapter 13, which permits an individual to cure arrears on a home mortgage and repay a portion of debts over three to five years have questioned its benefits.
Studies document low completion rates (on average about one third of filers obtain a discharge) and a failure by many individuals to save their homes, which is often a reason for filing for Chapter 13. 80 One recent study, using a logistic regression analysis of national data from the 2007 Consumer Bankruptcy project, concludes that the majority of individuals do not complete plans under Chapter 13, that Chapter 13 does not act as a home-saving device, and generally delays rather than prevents foreclosure.Chapter 13, the authors conclude is 'profoundly inefficient'. 81ese socio-legal studies contrast with an econometric study by Dobbie and Song, 82 which followed the trajectory of individuals in Chapter 13 from 1992 to 2005 in terms of subsequent earnings, mortality rates, and home foreclosure.Using a randomised methodology, 83 which allowed for the existence of a control group, the authors found that over the first five post-filing years those at the margin who were granted Chapter 13 bankruptcy protection were significantly better off financially in terms of income, 84 and had a significantly lower mortality rate and home foreclosure rate than those denied bankruptcy protection.The difference between the groups is represented by the significant deterioration in those who did not obtain bankruptcy protection rather than gains by those granted protection.Those who filed successfully for Chapter 13 have similar pre-and post-filing earnings.Therefore, bankruptcy appeared to mitigate the effects of a financial downturn for an individual preceding bankruptcy. 85The study also suggests that bankruptcy protection might increase incentives to continue to work, through its protection against wage garnishment. 86Economic stability might be promoted, 87 because individuals do not have incentives to go underground, or move state to avoid wage garnishment, and are protected against immediate home foreclosure.The authors conclude that Chapter 13 bankruptcy protection provides significant benefits for debtors. 88e contrast between the findings of this study and previous socio-legal studies is striking.Thus, although many individuals do not receive a discharge in Chapter 13, according to Dobbie and Song they have a better post-bankruptcy experience than those not granted protection.These US findings on Chapter 13 and Chapter 7 suggest that some debtors do benefit from these chapters, but for at least a minority of debtors the costs of bankruptcy may be high and it may not be addressing continuing problems of inadequate or insecure income. 89Sullivan, Warren and Westbrook also suggest that the stigma of bankruptcy may have increased over time as greater media publicity is given to filings and the importance of maintaining a good credit score.A potential bankrupt may now fear the cost to her or his credit reputation, in a similar manner to the historical fear of disapproval by one's neighbours and community. 90ropean studies of the longitudinal effects of personal insolvency relief are limited.No recent systematic studies exist in England and Wales, a jurisdiction which liberalised the bankruptcy discharge in 2002 by reducing the period from three years to one year.The English Insolvency Service evaluated the impact of this reform, concluding in 2007 that although a swift discharge did have immediate emotional benefits, bankrupts still faced difficulties in re-entering the financial market because there were no changes in lending and credit reference policies. 91The concept of stigma was associated by bankrupts with problems obtaining a bank account, being unable to repay creditors, and the effects on their credit rating. 92e few empirical studies of continental European repayment plans are troubling.A qualitative longitudinal analysis of individuals on debt restructuring plans in Finland indicates that individuals continued to live at a low subsistence level one year after the payment plan had ended. 93A pilot study of individuals who had used the Swedish debt restructuring system associated with Silicon Valley but socio-legal study of bankrupt entrepreneurs in the US does not always provide an optimistic picture of individuals 'bouncing back' in business. 102Lawless notes the mythology in the US of the founders of Google who financed their business initially through 'all of our credit cards and our friends' credit cards and our parents credit cards'. 103ankruptcy law may aspire to facilitate this type of high-risk, high-reward business but Lawless cites Shane's text The Illusions of Entrepreneurship 104 which notes that most small businesses fail; only a few are established in high tech industries; and they contribute only a modest number of jobs.A more forgiving bankruptcy law for self-employed individuals is certainly justifiable for similar reasons to those applicable to consumers, but the evidence is not overwhelming on its promotion of entrepreneurialism.

A Research on NINA Programmes
Little systematic research exists on the success of schemes designed specifically to provide a swift fresh start for those with few assets or income.In England and Wales, women represent the majority of users of the Debt Relief Order ('DRO').Many are sole parents and unemployed.
They owe debts to central and local state creditors and public utilities, as well as private creditors. 105Reductions in income and increases in expense dominate the reasons for filing a DRO (Table 3).A government review in 2014-15 did gather information from approved intermediaries and others on its operation.The consensus was that the 'current system is working well'. 106lients of intermediaries indicated that the DRO had improved their mental and physical health.The Order also had a positive impact on 50 per cent of debtors' relationships with their families.107However, little evidence exists as to the economic and financial impact of the order.Sixty-one percent of debtors in a non-random online survey indicated that they had not wished to access credit after the DRO, with one commenting that the experience of the DRO has 'taught them a lesson about borrowing in the future'. 108An earlier pilot study of bankruptcy had also found that a significant portion of bankrupts communicated a reluctance to borrow in the future,109 and Porter identified the same theme in her 2010 US study. 110The DRO could not only be performing a 'responsibilising' or disciplining function, but also undermining the objective of consumers re-entering the credit market.Further preliminary non-random research on social media suggests that individuals are often concerned about the effect of a DRO on their credit rating, with some regretting the effects it may have on their ability to obtain credit. 111Evaluation of the similar 'No Asset' procedure in New Zealand concluded that the benefits of the procedure, while significant, might be short term, addressing immediate debt problems but not more general budgeting skills among the debtors interviewed112 .
These special means-tested procedures may increase access through reduced costs but their relatively stringent access controls suggest a continuing fear among policy makers about moral hazard and opportunism in insolvency.The Insolvency Service also has an interest in minimising its costs in administering NINA insolvencies.It devotes modest resources to the DRO and covers its costs through the user fee, with advice agencies (the approved intermediaries) bearing the majority of the costs of screening individuals. 113any masters. 129We might want to be more modest in our expectations of the fresh start.We should also recognise the challenges in measuring the relationships between the fresh start and achieving a variety of social and economic objectives.Finally, the gap between the promise and the reality of the fresh start as a safety net suggests the value of considering alternative, more radical analyses of personal insolvency law in contemporary capitalism.These might open up new approaches and research questions for personal insolvency law research.

IV THE RADICAL CRITIQUE AND THE STUDY OF PERSONAL INSOLVENCY
The rise in the significance of personal insolvency law is linked with the transformations in capitalism since the 1970s.These have resulted in a rise in inequality, 130 stagnation of wages in several countries, and the growth in household debt.The decline of the 'male breadwinner' model of the household and the rise of the two-income household creates a hostage to fortune should one partner lost a job.Neoliberal policies reduced the power of labour and welfare entitlements and embraced consumerism and entrepreneurialism.This period of high globalisation since the 1980s has been one where the lower middle classes of the rich countries have been the largest losers, 131 and studies suggest that this group is most likely to face issues of over-indebtedness and insolvency.
Theorising about credit and debt increased exponentially after the Great Recession, often as part of analyses of contemporary capitalism and neoliberalism. 132Several writers have highlighted the role of household debt in maintaining consumer demand in the face of stagnating wages, but also in contributing to unsustainable housing bubbles. 133Crouch describes this phenomenon as 'privatized Keynesianism', 134 which reconciles labour flexibility with the maintenance of consumer demand.Streeck, adopting crisis theories of capitalism developed by the Frankfurt School in the late 1960s, argues that capitalism faced a legitimation crisis, as capitalist states were increasingly unable to steer the economy effectively and make good on increased social expectations.One strategy to address this problem was the promotion of private consumption, financed by 'lavish credit to private households', thereby 'buying time for the existing social and economic order'. 135 as the factory, a society of control now exists, 137 where the creditor-debtor relationship has become more central to contemporary capitalism than the capital-labor relationship.The power to control and constrain debtors 'does not come from outside, as in disciplinary societies, but from debtors themselves'. 138This shaping of individual subjectivity may be through government promotion of financial literacy, or technologies of credit scoring, with credit bureaux performing a sorting and disciplining role. 139Individuals are encouraged to check their credit score and improve their credit rating.They must learn to live with debt. 140Consumers are enlisted as regulatory subjects to make credit markets competitive (for example, through switching behaviour) and by policing 'internalities' such as impulsiveness or myopia, which might result in over-indebtedness.This is the world of the responsible borrower. 141e idea of debt as a disciplining force is not new.Calder argued that the rise of instalment debt in the US, which required individuals to adjust to the discipline of monthly payments, extended the discipline of the Fordist factory system to private consumption. 142He also documents the efforts of elite opinion makers to normalise and legitimise consumer debt, for example changing its description from 'consumptive' to consumer debt in the 1930s.This conscious creation of a debt culture was supported both by labour and business interests in the US. 143rxist analyses link both material conditions and ideological factors to paint a picture of exploitative credit, where financial institutions have increasingly turned to value-extraction from consumers as a source of profit, 144  20, remarks pithily that 'we are no longer slaves only to the machine, to the 9-5 routine, we've become slaves to interest payments.We no longer just generate profits for our bosses through our work, but also profits for financial middlemen through our borrowing.A single mum on benefits, forced into the world of payday loans and buying household goods on credit, can be generating a much higher profit rate for capital than an auto industry worker with a steady job'. 146 achieved through rich qualitative research.Although much has been written at a high theoretical level about the shaping of individual subjectivity in neoliberalism, empirical investigation of the success of such shaping is limited. 152Law and society scholarship suggests that individuals are not passive recipients of law but may resist or reinterpret laws.Understanding how different individuals approach the insolvency process and its aftermath might increase our knowledge of how individuals think about the legal process and the role of factors such as class and gender in these constructions.

V CONCLUSION
This article sketched an emerging paradigm of personal insolvency with partial repayment alternatives as a preferred policy instrument, combined with residual immediate relief for the deserving poor.The paper documented concerns about the economic and social benefits of repayment alternatives, and the possible limits of insolvency law in addressing the problems of NINA debtors, while pointing to the need for further research.The growth of longitudinal research on the extent to which individuals receive a fresh start suggests that, while bankruptcy may benefit some groups, for others it is merely a way-station in a continuing battle with problems of debt and unstable income.Moreover, the connection between a liberal discharge procedure and the promotion of entrepreneurialism, a dominant international driver of reforms, deserves further examination.
The mixed findings of existing research on the effectiveness of the fresh start suggest the need for more evidence-based policy and greater focus on the role of credit reference systems in determining the success of the fresh start.The current wave of empirical research raises questions whether bankruptcy is a progressive institution and what its role should be within social welfare systems, whether it dampens pressures for social welfare reform, or acts as a useful signal of the need for reform.The radical critique of bankruptcy as a legitimating and disciplinary institution in contemporary capitalism merits a scholarly response.It also has the methodological message that qualitative analysis of the discourse of bankruptcy and the experience of bankrupts may increase knowledge of the extent to which bankruptcy is a progressive or disciplinary institution.The introduction of special procedures in several countries to provide debt relief for low income individuals provides the opportunity to test the possibilities and limits of the fresh start precisely for those who may fall into the category of a 'surplus population'marginalised and low-income workers.

Table 1 : France: Principal Causes of Over-Indebtedness 2014
See eg Donna McKenzie Skene and Adrian Walters, 'Consuming Passions: Benchmarking Consumer Bankruptcy Law Systems' in Paul Omar (ed) International Insolvency Law (Ashgate, 2008) 137: 'hardly any attention has been paid at the international level to the potential global socio-economic impact of consumer overindebtedness.This contrasts with the global interest in business insolvency and rescue.' 21Writing in 2003 we noted that, 'Twenty years ago an academic book about consumer bankruptcy systems around the world would not have been possible.Most countries did not have a consumer bankruptcy system.' 'Introduction' in Johanna Niemi, Iain Ramsay and William C Whitford (eds) Consumer Bankruptcy in Global Perspective (Hart, 2003) 1. 20 Towards an International Paradigm of Personal Insolvency Law?A Critical View QUT Law Review 17 (1), October 2017 | 19

Table 2 : England and Wales: Bankruptcies by Cause of Insolvency as Recorded by the Official Receiver 2015.
Source: Insolvency Service, Bankruptcies by age gender and cause of insolvency 2015.https://www.gov.uk/government/statistics/individual-insolvencies-by-location-age-and-genderengland-and-wales-2015>.In 955 cases, the cause was recorded as 'unknown/non-surrender'.These cases are not included in the Table.
See Johanna Niemi, 'The Role of Consumer Counselling as Part of the Bankruptcy Process in Europe' (1999) 37 Osgoode Hall Law Journal 409, 411.
QUT Law Review Volume 17 (1) -Special Issue: Personal Insolvency -A Fresh Start QUT Law Review 17 (1), October 2017 | 20 See Yan Liu and Christoph B Rosenberg, 'Dealing with Private Debt Distress in the Wake of the European Financial Crisis: A Review of the Economic and Legal Toolbox' (IMF Working Paper, No 13/44, 2013).See also International Monetary Fund, Spain: 2013 Article IV Consultation: Selected Issues (IMF Country Report, No 13/245, 2013) 25.The IMF persuaded Cyprus to adopt a law which includes: a three-year discharge for bankruptcy; the possibility of a restructuring plan in relation to secured and unsecured debts subject to approval of 75 per cent in value of creditors; a no income no asset programme with discharge after one year for individuals with debts under €20 000.See also Greece, Memorandum of Understanding between EU and Greece (2015) 18-19, <http://ec.europa.eu/economy_finance/assistance_eu_ms/greek_loan_facility/pdf/01_mou_20150811_en.pdf>.India has adopted a no-asset procedure in its recent reform.See the Insolvency and Bankruptcy Code 2016 Part III Chapter 11 introducing a 'fresh start process' for debtors with limited income, assets and debts.The debtor is discharged after six months (s 92).43See in Canada: Stephanie Ben-Ishai and Saul Schwartz 'Bankruptcy for the Poor?' (2007) 45 Osgoode Hall Law Journal 471. 44eg Ronald J Mann, 'Making Sense of Nation-Level Bankruptcy Filing Rates' in Niemi, Ramsay and Whitford above n 10 243-4; Elizabeth Warren et al, The Law of Debtors and Creditors: Text, Cases and Problems (Wolters, Kluwer, 7 th ed, 2014) 320.But see Angela K Littwin, 'The Affordability Paradox: How Consumer Bankruptcy's Greatest Weakness May Account for Its Surprising Success' (2011) 53 William and Mary Law Review 1933.See also Hermie Coetzee and Melanie Rostoff, 'Consumer Debt Relief in South Africa -Should the Insolvency System Provide for NINA Debtors?Lessons from New Zealand' (2013) 22 International Insolvency Review 188.45CitizensAdvice, a registered charity, is the major intermediary.Citizens Advice aims 'to provide the advice people need for the problems they face' and improve the policies and principles that affect people's lives', a research and campaigns agenda known as 'social policy', <https://www.citizensadvice.org.uk/about-us/>.It receives the majority of its funding from central government and each local bureau may also receive funds from institutions such as the National Lottery.A central office provides expertise, but it relies heavily on volunteers in local bureaux.Its website indicates that there are '338 individual charities… Of the 28 500 people who work for the service, over 22,000 of them are volunteers and nearly 6,500 are paid staff'.46SeeDebt Relief Orders (Designation of Competent Authorities) Regulations 2009, reg 3 See discussion in Ramsay, above n 16, ch 6.
54World Bank, above n 52, 134.55Information provided by Jan Heuer citing 2015 statistics on over-indebtedness where 46 per cent of debtors are unemployed, 37 per cent without formal job qualifications, 38 per cent with debts below 10 000, 29 per cent with debts between 10 000 and 25 000, 48 per cent with incomes below 900 euro a month: Jan Heuer, 'The New Poor Person's Bankruptcy: International and Comparative Dimensions' (Workshop presentation, University of Kent, 28 April 2016) on file with author.56SeeRamsay, above n 16, ch 5.
See, Kagan J in Ransom v FIA Card Services, N. A 562 U.S. 61, 64 (US Supreme Court, 11 January 2011): 'In particular, Congress adopted the means test -[t]he heart of [Bankruptcy Abuse Prevention and Consumer Protection Act 2005's] consumer bankruptcy reforms… and the home of the statutory language at issue hereto help ensure that debtors who can pay creditors do pay them.' reluctance to consider bankruptcy and played on misconceptions about it to deter them from this alternative.The FCA reported 'many instances where customers were recommended very long-term debt management plans (often many decades...) when debt relief solutions are likely to have been more appropriate but adequate information and advice [were] not provided': Financial Conduct Authority, 'Quality of Debt Management Advice' (Thematic Review TR15/8, June 2015) [4.55] <https://www.fca.org.uk/publication/thematic-reviews/tr15-08.pdf>.In one Towards an International Paradigm of Personal Insolvency Law?A Critical View QUT Law Review 17 (1), October 2017 | 27

Table 3 : England and Wales: Causes of Debt Relief Order 2015 (Multiple Causes)
104Scott A Shane, The Illusions of Entrepreneurship (Yale University Press, 2008).105Anearlysurveyby the Insolvency Service noted that the profile of debtors accessing the DRO system was primarily 'low income, predominantly unemployed individuals with an average of six creditors; over 53 per cent of debt was owed to banks, building societies and credit card companies':InsolvencyService, DROs Initial Evaluation Report 2010 (2010).More informal data since the recession suggest that public creditors may now be more significant: see eg Anne Pardo et al, Unsecured and Insecure (Citizens Advice, 2015).Towards an International Paradigm of Personal Insolvency Law?A Critical View QUT Law Review 17 (1), October 2017 | 33 Discourse theorists influenced by Foucault have highlighted how individuals are increasingly encouraged to behave like responsible credit users who 'learn to exploit credit markets appropriately'.Lazzarato argues in The Making of the Indebted Man 136 that in contemporary society with fewer traditional 'sites of discipline', such129Howard above n 26, 1069.130SeeEngelbertStockhammer,'RisingInequality as a Cause of the Present Crisis' (2015) 39 Cambridge Journal of Economics 935; Ramsay, above n 16, ch 1.131See Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization (Harvard University Press, 2016) 20.Milanovic notes also the large rise in inequality where 'within-nation inequalities in the rich world have increased during the past twenty-five to thirty years'.132Forareview of studies see Basak Kus, 'Sociology of Debt States, Credit Markets and Indebted Citizens' (2015) 9(3) Sociology Compass 212.133'Cynical as it may seem, easy credit has been used as a palliative through history by governments that are unable to address the deeper anxieties of the middle class directly': Raghuram Rajan, Fault Lines: How Hidden Fractures Still Threaten the World Economy (Princeton University Press, 2010) 8-9.134SeeColin Crouch's discussion of 'Privatised Keynesianism' in Colin Crouch, 'Privatised Keynesianism: An Unacknowledged Policy Regime (2009) 11 British Journal of Political and International Relations 382. 135Wolfgang Streeck, Buying Time: The Delayed Crisis of Democratic Capitalism (Verso, 2013) 4. See also discussion in David Harvey, A Brief History of Neoliberalism (Oxford University Press, 2005).
136Maurizio Lazzarato, The Making of the Indebted Man: An Essay on the Neo-Liberal Condition (MIT Press, 2012).
legitimated by liberal credit narratives.Soederberg argues that capital exploits low income workers through the credit system, a form of secondary exploitation which fails to address the continuing problem of falling profits, low productivity and stagnant wages.The law structures and legitimates this exploitation through what she terms the Debtfare State as one component of the neoliberal state.A neo-liberal discourse of the 'democratisation of credit', 'financial inclusion', and 'consumer protection' legitimates this exploitation.The democratisation of credit to poorer individuals substitutes for secure jobs; 'financial inclusion' masks the often poor credit terms which many workers obtain; and consumer protection relies on 'individualized market based protection rather than the welfare state'.145Bankruptcyprocessesaddress the problems of higher level of default in this system through increased disciplining measures such as mandatory counselling, means testing, more repayment alternatives, and processes which delay the opportunity to declare bankruptcy.According to Soederberg, the US's Bankruptcy Abuse Prevention and Consumer Protection Act 2005 ('BAPCPA') represents the raw power of capital to reduce the scope of bankruptcy's fresh start.146Bankruptcyalsolegitimates the system by individualising failure and responsibility, neutralising collective responses to debt.The increased focus on repayment alternatives to straight bankruptcy reduces losses, forces responsibility onto consumers and suggests that straight debt forgiveness is a suppressed political alternative in contemporary society.Soederberg does not provide any reform proposals beyond those of guaranteeing a living wage and public provision for basic social needs.147Thisradicalcritique is not fundamentally different from contemporary critiques of the US system by progressive scholars such as Katherine Porter, Jacob Hacker 148 or Jay Westbrook.Progressives recognise the need to change income support and healthcare systems, but they probably assume, unlike Soederberg, that bankruptcy is a potentially useful institution which can be reformed to address the limits of the current system.Soederberg's critique overgeneralises and lacks attention to empirical and historical facts.For example, it is difficult to adopt her characterisation of the US Bankruptcy Reform Act 1978 as 'burdensome' to debtors. 149wever, the radical approach may be useful for framing future research.It underlines the importance of discourse and narratives in shaping both social and individual understanding of debt, default and insolvency, and provides a potential grid for analysing existing findings.I outlined earlier the important role of insolvency statistics in shaping official narratives of failure.Further studies might explore the relationship of professional discourses of failure to individual debtors' narratives and what debtors learn from the process, relating these findings to studies of individuals' relationship to law and experience of the legal system. 150ch a study could provide an opportunity to understand the extent to which debtors 'buy in' to neoliberal norms, identifying their problems in personal mismanagement rather than broader structural causes.151Addressingthis question may be best 145 Susanne Soederberg, Debtfare States and the Poverty Industry: Money, Discipline and the Surplus Population (Routledge, 2014).Paul Mason in his popular book PostCapitalism: A Guide to Our Future (Allen Lane, 2015) Soederberg, above n 145, 86-90; and see Linda Coco, 'Debtor's Prison in the NeoLiberal State: "Debtfare" and the Cultural Logics of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005' (2012) 49 California Western Law Review 1. See also the special issue of Critical Sociology (2014) for a series of articles on the increasingly coercive nature of debtor-creditor relations.About 100 individuals are imprisoned in England and Wales annually for non-payment of council tax.Bankruptcy is used by councils as a means of enforcing council tax.147Soederberg, above n 145, 244. 148uptcy can be a backstop for the worst financial collapses but was never intended as a replacement for a well-designed and robust safety net... Bankruptcy relief for approximately 1.5 million middle class families each year is ultimately an enormously wasteful, inefficient and incapable means of providing economic security to those who need it': Hacker, above n 11.149Soederberg, above n 145, 87.150See eg Patricia Ewick and Susan S Silbey, The Commonplace of Law: Stories of Everyday Life (University of Chicago Press, 1998).151Althoughthis may be problematic since the norm that everyone should pay their debts is not simply found in neoliberalism.See Liam Stanley, '"We're Reaping What We Sowed": Everyday Crisis Narratives and Acquiescence to the Age of Austerity', (2014) 19 New Political Economy 895.Towards an International Paradigm of Personal Insolvency Law?A Critical View QUT Law Review 17 (1), October 2017 | 39