A Tale ofTwo Debtors: Responding to the Shock of Over-Indebtedness in France and England - a Story from the Trente Piteuses

Modern Law Review

Volumn 75, Issue 2, 2012, Pages 212-248

  Ramsay, Iain ^a  

^a UNIVERSITY OF KENT   (United Kingdom)

Author keywords

Comparative Law; Consumer Bankruptcy; Consumer Law; Credit and Debt; French law; Insolvency

Indexed keywords

EID: 84857704970     PISSN: 00267961     EISSN: 14682230     Source Type: Journal    
DOI: 10.1111/j.1468-2230.2012.00897.x     Document Type: Article

References (214)

1. L. Bihl, 'Le surendettement: apparition d'un fléau social' in M. Gardaz (ed), Le surendettement des particuliers (Paris: Anthropos, 1997) quoted in A. Chatriot, 'Protéger le consommateur contre lui-même: la régulation du crédit à la consommation' (2006) Vingtième siècle Revue d'histoire 95.
2. Data documenting the increase in formal measures of over-indebtedness are available for France in the National Statistics on the Activities of Over-indebtedness Commissions 1990-2009 at (last visited 30 November 2011). Applications to the over-indebtedness commissions have increased from a rate of 1.6 per thousand capita in 1991 to 3.4 per thousand capita in 2010. For England and Wales see Insolvency Service statistics (last accessed 9 August 2011) and see below discussion of England and Wales at 235 et seq.
3. There is substantial discussion on appropriate measures for defining and measuring over-indebtedness. See, eg, National Audit Office, Helping Over-Indebted Consumers (London: Comptroller and Auditor General, 2010); The European Commission, Towards a Common Operational European Definition of Over-Indebtedness (Brussels: DG Employment, Social Affairs and Equal Opportunities, 2008); Oxera Consulting, 'Are UK households over-indebted?' Report prepared for APACS, BBA, FLA, CCA (2004).
4. The Griffiths Commission on Personal Debt, What Price Credit? (2005) at i 'disproportionately affects low income families, lone parents ...' In France see G. Gloukoviezoff, L'Exclusion Bancaire (Paris: Presses Universitaire, 2010) 222 et seq, see below reports of Bank of France on profile of over-indebted at 224. Bertrand Bissuel, 'Le surendettement se propage parmi les ménages les plus démunis' Le Monde 2 August 2011.
5. DTI, DWP, Tackling Over-Indebtedness (Annual Report, 2005) 22: 'Women are over-represented on all types of over-indebtedness indicators'. Statistics on the use of debt relief orders (see infra at 241) indicate a significant over-representation of women. See also T. Sullivan, E. Warren and J. Westbrook, The Fragile Middle Class: Americans in Debt (New Haven: Yale, 2000) 36-38.
6. See, eg, Cour des Comptes, (similar to UK National Audit Office), La lutte contre le surendettement des particuliers; une politique publique incomplète et insuffisament pilotée (Paris, 2010); National Audit Office, n 3 above. Public Accounts Committee, Helping Over-indebted consumers (HC, Public Accounts Committee, 2010)
7. Loi n°89-1010 du 31 décembre 1989 relative à la prévention et au règlement des difficultés liées au surendettement des particuliers et des familles. The current provisions are now located in Book III, Title III of the Code de la Consommation. For official background see L. Lamier, Projet de la loi relatif à la prévention et au règlement des difficultés liées à l'endettement des particuliers Avis no 43 (1989-90); J. Simonin, Rapport no 40. Commission des Affaires Économiques (Paris, 1989-90); For a general analysis of French developments, see J. Kilborn, 'La Responsabilisation de L'Économie: What the United States Can Learn From the New French Law on Consumer Overindebtedness' (2004-05) 26 Michigan Journal of Int'l law 619.
8. Code de la Consommation, L331-1. See section headed 'The Role of the Commissions' below, for discussion of the contemporary composition of the Commission which includes a lawyer and social worker.
9. L330-1 defines over-indebtedness as the 'clear impossibility of a debtor in good faith to address his non-professional debts due and coming due'.
10. See Cour des Comptes, n 6 above, 482.
11. Under the 'rétablissement personnel' procedure which is now defined as the impossibility of putting in place a repayment plan including a partial write down of debts over eight years. L330-1.
12. See generally Insolvency Act 1986, Part IX. This may include an income payment agreement or order over three years where there is surplus income.
13. See Insolvency Act 1986, Part 7A inserted by the Tribunals Courts and Enforcement Act 2007, s 108(1) together with schedule 17 in force since April 2009. For the relevant rules see the Insolvency (Amendment) Rules 2009.
14. The rules on IVAs are found in Insolvency Act 1986, Pt VIII, ss 252-263G. A straightforward consumer IVA protocol exists for consumer cases. See (last visited 28 November 2011).
15. See Ministry of Justice, Department of Businesss Innovation and Skills et al, Debt Management Schemes - Delivering effective and balanced solutions for debtors and creditors (London: TSO, 2009); For an empirical analysis see S. Collard, An Independent Review of the Fee-Charging Debt Management Industry (Bristol: Personal Finance Research Centre, 2009).
16. A. Walters, 'Individual Voluntary Arrangements: a "fresh start" for salaried consumer debtors in England and Wales' (2009) 18 International Insolvency Review 5.
17. See Code de la Consommation, L. 321-1.
18. See discussion below at 239.
19. In England and Wales an individual must pay for access to bankruptcy, even for the Debt Relief Order which requires a fee of £90. See below discussion at 329.
20. See A. Knapp and V. Wright, The Government and Politics of France (London: Routledge, 2006) 330-338.
21. Tony Prosser argues that the French concept of social solidarity in regulation starts 'from the duties of the community to secure inclusiveness, resting both on a moral sense of equal citizenship and a more prudential goal of minimising social fragmentation'. T. Prosser, The Regulatory Enterprise: Government, Regulation and Legitimacy (Oxford: OUP, 2010) 15-16.
22. See J. Loughlin, SubNational Government, The French Experience (London, Palgrave, 2007) ch 7.
23. See discussion below at 219.
24. See I. Ramsay, 'Bankruptcy in Transition: The Case of England and Wales - The Neo Liberal Cuckoo in the European Bankruptcy Nest' in J. Niemi, I Ramsay and W. Whitford (eds), Consumer Bankruptcy in Global Perspective (Oxford: Hart, 2003); A. Walters, 'Personal Insolvency after the Enterprise Act: An Appraisal' (2005) 5(1) Journal of Corporate Law Studies 65.
25. See Treaty of the European Union, art 3 (3).
26. See R. La Porta, F. Lopez-de-Silanes and A. Shleifer, 'The Economic Consequences of Legal Origins' (2008) 46 Journal of Economic Literature 285.
27. See discussion in B. Eichengreen, The European Economy since 1945: Co-ordinated Capitalism and Beyond (Princeton: Princeton UP, 2007) ch 11; G. Gloukoviezoff (2010), n 4 above, 58-60; Kilborn, n 7 above. See also J. Levy, 'Economic Policy and Policy-Making' in A. Cole, P. Le Gales and J. Levy (eds), Developments In French Politics 3 (Basingstoke: Palgrave Macmillan, 2005) 170.
28. See R. Price, A Concise History of France (Cambridge: CUP, 2nd ed, 2005) 388 describing the bankruptcy of Creusot-Loire, a large engineering company. For a discussion of the French commercial bankruptcy laws of 1984 and 1985 see M. Jeantin and P. Le Cannu, Entreprises en Difficulté (Paris: Dalloz, 7e ed, 2006) 52.
29. Eichengreen, n 27 above, 344-345.
30. The UK debt-to-income ratio grew from 21 percent in 1981 to 68 percent in 1988. See TableIII.7 National Consumer Council, Credit and Debt: The Consumer Interest (London: TSO, 1990).
31. See discussion in V. Vigneau and G-X. Bourin, Droit du Surendettement des particuliers (Paris: Lexis Nexis, 2007) 3-4; Kilborn, n 7 above, 626.
32. For discussion of the decrease in job security and increased unemployment see L. Boltanski and E. Chiapello, Le Nouvel Esprit du capitalisme (Paris: Gallimard, tel edition, 2011).
33. See G. Trumbull, Consumer Credit and the Politics of Market Access (unpublished file available at (last visited 1 December 2011)). See also J-L. Vatin, 'Bilan des Commissions de surendettement' (2008) 10 La Revue du Trésor 762; J-L. Vatin, 'Traitement du Surendettement: Nouvelles Perspectives' Bulletin de la Banque de France 2e trimester 1996 at (last visited 29 November 2011) 103.
34. See I. Ramsay '"To Heap Distress upon Distress?" Comparative Reflections on Interest Rate Ceilings' (2010) 60 Univ Toronto LJ 709.
35. See D. Salomon, 'Quand une politique Publique en cache une autre ... La Loi Neiertz comme réponse politique et acte opportuniste des organes de tutelle' in Gardaz (ed), n 1 above, ch 1.
36. See Jeantin and Le Cannu, n 28 above, 109-127, 147-162.
37. Code Civil, Article 1244 para 2.
38. See discussion in D. Dagorne, 'La faillité civile en Alsace et Moselle' in Gardaz (ed), n 1 above, 39.
39. See 'La faillité civile existe en Alsace et en Moselle depuis 1877' Les Echos 29 April 2003; 'La Faillite civile : l'expérience alsacienne, un succès' Les Echos 28 May 2003.
40. See discussion of US influence on European consumer insolvency in I. Ramsay, 'Functionalism and Political Economy in the Comparative Study of consumer insolvency: an unfinished story from England and Wales' (2006) 7 Theoretical Inquiries in Law 625.
41. Salomon quotes the Association Française des Sociétés Financières (ASF) data indicating French consumer credit per capita in 1989 of 2, 000frs compared with 20, 000frs in the US, 8, 500frs in Germany and 4, 700frs in the UK; n 35 above, 18-19.
42. See P. Merle, Revue trimestrielle de droit commercial (1990) 467.
43. See Jeantin and Le Cannu, n 28 above, 116.
44. Salomon, n 35 above, 30.
45. G. Ripert, 'Le droit de ne pas payer ses dettes' (1936) Dalloz, Recueil Hebdomadaire Chronique 57.
46. See G. Paisant, 'La Réforme de la procedure de traitement du surendettement par la loi du 1er août 2003 sur la ville et la rénovation urbaine' (2003) Revue trimestrielle de droit commercial 671, 673.
47. See Jeantin and le Cannu, n 28 above.
48. Présentation de la loi du 31 Décembre 1989 par le secrétaire d'État à la consommation, Brochure DGCCRF 1990.
49. See F. Ferrière and P-L. Chatain, Le surendettement des particuliers (Paris: Dalloz, 6e ed, 2006) 04.20. 'The loi Neiertz was introduced to assist a population of debtors who were victims of bad credit management. Progressively it has been transformed into a safety net for a growing number of persons who suffer from economic marginalization. Following established terminology we have moved from "active over-indebtedness"to "passive over-indebtedness"'.
50. Certain debts were excluded from a plan: alimentary debts (see Code Civil, arts 203, 205, 207 and Code de l'action sociale et des familles, art L132-6), reparations for crimes, and criminal fines, L 333-1. Fiscal debts were privileged until 2003.
51. See, eg, Le Rapport Leron 1991; J-J. Hyest and P. Loridant, Rapport d'Information no 60 Surendettement Prévenir et Guérir (Paris: Sénat Français, 1997); J-C. Le Duigou, Rapport sur l'endettement et surendettement des ménages. Avis et Rapports du Conseil Économique (Paris: La Documentation française, 2000); J. J. Hyest, Projet de loi d'orientation et de programmation pour la ville et la rénovation urbaine Avis no 404 (Paris: Sénat, 2002-03); G. Canivet, Rapport du comité de suivi de l'application des dispositions relatives au surendettement de la loi no 2003-710 du 1er août 2003 (Paris, Cour de Cassation, 2005); Le Médiateur de la Republiqué, Le Malendettement, nouvelle urgence sociale (Paris, 2006); Conseil Économique et Social, Le Surendettement des Particuliers (Paris, 2007); Cour des Comptes (2010) n 6 above.
52. Hyest and Loridant, n 52 above, 3 (38 percent to 20 percent in the general population).
53. See E. Leser, 'Le rapport annuel du comité des usagers La loi sur le surendettement est inefficace pour régler les problèmes des faibles revenues' Le Monde 4 August 1992.
54. Hyest and Loridant, n 52 above.
55. These included variable rate mortgages which increased over time; a variety of loans which qualified for a housing deposit [PAP], undercutting the need for a real financial contribution by the borrower; and subsidies to the purchase of new homes which artificially inflated their prices but made them difficult to sell. For a full discussion of the sociology of this era of housing development see P. Bourdieu, The Social Structure of the Economy (Cambridge: Polity, 2005).
56. Ferrière and Chatain, n 50 above, 140-141.
57. Circ 30 November 1990. A combination of L312-8 of the Code de la Consommation and art 1244-1 to 1244-3 of the Civil Code enacted in 1991 permitted a debtor to obtain a modification of mortgage obligations for up to two years.
58. Based on interpretation of a decision of the Cour de Cassation. See Civ 1 ère 1er Dec 1998 D.1999 Somme 284 obs. Willmann, who is critical of this approach in the context of un droit social.
59. Since 2003 a plan could extend beyond ten years to permit an individual to avoid losing a principal residence. See L 331-6 and L 331-7.
60. The Lefebvre report (2008) Rapport d"Information sur les emprunts immobiliers à taux variable notes that the lower rate of homeownership in France does not reflect a cultural aversion to homeownership. Nine out of ten French would like to be home owners. Usury laws restrict the availability of non-standard mortgages and home equity lending remains constrained notwithstanding the introduction of the hypothèque rechargeable in 2006. The class distribution of housing is reflected by data indicating that 70 per cent of high earners own their home, 46 per cent of the middle class and 33 per cent of those of modest income. In 1980 this distribution was 51, 45 and 46 per cent.
61. J. Doyere, 'Après un an d'application de la "loi Neiertz" Les Commissions de surendettement ont reçu cent mille dossiers' Le Monde 8 March 1991: E. Leser, 'Le Rapport Annuel du Comité des Usagers: La Loi sur le surendettement est inefficace pour régler les problèmes des faibles revenues' Le Monde 4 August 1992. See also the Leron report n 52 above.
62. See V. Devillechabrolle, 'L'Institut National de la consommation dresse un sombre bilan de la loi Neiertz sur le surendettement' Le Monde 21 April 1995.
63. B. Epinay, 'Consommation: Bilan au Conseil des Ministres - Surendettement des ménages: Neiertz veut aménager sa loi' Les Echos 14 January 1993.
64. See Vatin n 33 above, 107, 'Traitement du Surendettement'. The distinction between active and passive over-indebtedness originates in the Comité Consultatif Rapport du Groupe de Travail sur l'endettement et le surendettement des ménages (July 1989) and a report in that document by L. Arondel and D. Kessler
65. See Hyest and Loridant, n 52 above.
66. See discussion in Boltanski and Chiapello, n 32 above, chapters IV and V.
67. Le Duigou above note 52 at 69-70.
68. See T. Sullivan, E. Warren and J. Westbrook, n 5 above. They use education, occupational category and home ownership as indicia of middle class.
69. See C. Brousse, 'ESeC: The European Union's Socio-Economic Classification Project' (2009) 15 Courrier des Statistiques 27, 29.
70. See Bank of France, Enquête Typologique 2010, 17 Bank of France 2011 at (last visited 1 December 2011).
71. 16. Defined as 'personnes sans activité professionelle' this category excludes individuals who became unemployed after being employed.
72. See studies cited in Hyest and Loridant, n 52 above.
73. This is the SMIC (Salaire minimum interprofessionnel de croissance) based on an hourly rate of €8.86.
74. See P. Lombardo, N. Missègue, E. Seguin and M. Tomasini, 'Inégalités de vie et pauvreté Vue d'ensemble' Insee (2011) 9.
75. Enquête Typologique n 71 above, 31, 33.
76. The poverty threshold in France was €949 in 2008 n 76 above, 14.
77. See République Francaise Centre D'Analyse Stratégique No 20 -2009, La Mesure du déclassement (La Documentation Francaise, 2009) 65 and 98.
78. C. de Montlibert, 'Les surendettés ou les déchus du monde économique' (2006) 32 Regards Sociologique 109-133.
79. See Boltanski and Chiapello, n 32 above, 467-472.
80. The distinction appears in almost all official reports on over-indebtedness and also in the French media. For the classic analysis of the social construction of debtors see P. Rock, Making People Pay (London: Routledge, 1973).
81. See, eg, Hyest, n 52 above, 11.
82. S. Post, 'Du Flambeur au Victime? (From Big-Time Gambler to Victim):Vers une problématisation consensuelle du surendettement' (2009) Sociétés Contemporaines 67, 82.
83. Hyest and Loridant, n 52 above.
84. See discussion in Gloukoviezoff, n 4 above, 221-227.
85. See Le Duigou, n 52 above.
86. For example, there seemed to be an automatic equation of divorce with a passive classification, however long an individual had been divorced See Cour des Comptes n 4 above, 466-467.
87. Rapport 2002-2003 Comité Consultatif du Conseil National du Crédit et du Titre, 43 et seq.
88. 'Faillite civile: les consommateurs font pression sur le gouvernement' Les Echos 4 February 2003, 20.
89. See 'Banque de France: Jean-Claude Trichet en "accord intellectuel" avec le rapport au vitriol de la cour des Comptes' Les Echos 13 March 2003.
90. 'Restructuration de la Banque de France: la complainte des "pas-chez-moi"' Les Echos 3 April 2003.
91. 'Les professionnels s'accommodent de la procédure de rétablissement personnel' Les Echos 7 August 2003.
92. Defined as the 'manifest impossibility of putting in place treatment (repayment) measures including partial discharge of debts'.
93. See Hyest report n 52 above.
94. Avis No 405 de M. Éric Doligé, fait au nom de la commission des Finances, du contrôle budgétaire et des comptes économiques de la Nation Avis 405 (Paris: Commission des Finances 2002-2003). The 2009 Annual Report of the Cour de Cassation comments that 'Because the profile of over-indebted debtors has changed, the objectives of the over-indebtedness procedure evolves. The social dimension and a concern to integrate it within a more global fight against exclusion, assuring social cohesion, takes precedence over the purely procedural aspects.' (author's translation). Rapport Annuel Cour De Cassation (2009), Les personnes vulnérables dans la jurisprudence de la Cour de cassation, Contributions de la deuxième chambre civile de la Cour de cassation 146.
95. See Paisant, n 47 above, 674.
96. Hyest, (2003) n 52 above.
97. See the Canivet review (2005) n 52 above.
98. See the empirical study of cases between 2003 and 2005. C. Bourreau-Dubois, B. Chopard and Y. Ziane, 'Plans de redressement et procédure de rétablissement personnel: une analyse du traitement du surendettement des particuliers' (2010) at (last visited 29 November 2011).
99. loi no. 2007-1787 2007 inserting a new article L 332-6-1.
100. For a summary of the reforms see V. Vigneau (2010) Receuil Dalloz Chroniques (no39) 2593-2602. The text of the law is available at (last visited 29 November 2011).
101. L 331-7 and L331-7-1. Béguery claims that 80% of plans are now confirmed by the courts See M. Béguery, 'Le Dispositif de traitement des situations de surendettement des particuliers: les principaux effets de la loi Lagarde' Bulletin de la Banque de France (no182) (2010).
102. See generally Knapp and Wright, n 20 above.
103. See generally Kilborn, n 7 above; D. Laniet, B. Munoz-Perez, P. Pailler and Evelyne Severin 'le traitement amiable et judicaire des situations du surendettement' Infostat, Justice 37 May 1994 3; Hyest and Loridant, n 52 above.
104. See the empirical study, D Saudane de Olivera, 'La réticence des juges face à l'application des lois sociales' (1999) 42 Droit et Société 421 and P. Ancel, 'La Pratique Française du redressement judicaire civil' in Gardaz, n 1 above, 55.
105. In the event of a failure of negotiation, the Commission could recommend a plan for approval by a judge.
106. See Les Echos 6 June 1994, B. Epinay, 'Consommation: Opposition Générale à la reforme envisagée - Surendettement des ménages: le ton se durcit' 15: 'Surendettement: des associations de consommateurs déposent un recours devant le Conseil d'Êtat' Le Monde, Société 8 July 1995 (describing proposed action by a major consumer group before the Conseil d'État challenging the law as unconstitutional); A. Chemin, 'En Dépit d'un rapport de forces "avantageux" Le Syndicat de la magistrature estime que les juges restent en liberté surveillé' Le Monde, Société 29 November 1994; A. Chemin, 'Réuni en congrès à Bobigny Le Syndicat des avocats de France dénonce l'emergence d'une justice "duale"' Le Monde 15 November 1994.
107. See L 332-1 and L332-2 (pre 2010).
108. See V. Vigneau and G.-X. Bourin, (2007) n 31 above, 16. For a commentary on its role see the 2009 Annual Report of the Cour de Cassation, n 97 above.
109. See G. Paisant, 'La Jurisprudence de la cour de cassation et la question de la réforme de la loi sur le surendettement des particuliers' (1994) Dalloz Chronique 173. See also Cass Civ 1991 D. 1991 307 note Bouloc.
110. See Cass 1 ère civ 4 Avr 1991 (Bull.civ 1 no 123) and see discussion in Vigneau and Bourin, n 31 above, 44 f. The Court limited the effect of the good faith requirement by requiring creditors to prove bad faith and prohibiting lower courts raising the issue on their own motion. The Court also indicated that negligence was not the equivalent of bad faith. Ière Civ 31 Mars 1992, Bull 1992, I no 107, arrêt no 3, pourvoi no 91-04.032.
111. The Court permitted professional debts to be included in a plan if non-professional debts were sufficient to render an individual unable to pay her debts. See discussion of cases in Vigneau and Bourin, n 31 above, 85-92.
112. Bracq Bull. Civ. I no 41, arrêt n2 D. 1993.343 note Bonthoux.
113. See G. Paisant, Revue Trimestrielle de Droit Commercial (1993) 368, 370. The Court also held that it was improper for the lower courts to speculate on the debtor's future prospects to justify restricting access to the Commission. Ière Civ 31 Mars 1992, Bull 1992, I no 107, arrêt no 3, pourvoi no 91-04.032.
114. For a general discussion see J. Bell, French Legal Cultures (London: Butterworths, 2001) 66 et seq; M. Mitchel de S.-O.-l'E. Lasser, Judicial Deliberations: A Comparative Analysis of Transparency and Legitimacy (Oxford: OUP, 2009).
115. Le Duigou, n 52 above.
116. The Cour de Cassation has held that Commissions are not subject to rules such as art 6.1. of the European Convention on Human Rights. See Cass 2e civ. 18 Dec 2003 Bull Civ II n0 397. And see decision of Conseil D'État CE 18 June 1997, no 170824, inédit au Recueil Lebon. For further discussion see Vigneau and Bourin, n 31 above, 133-134
117. The complexities of the contemporary role of the préfet are described in Loughlin, n 22 above ch 7.
118. For example, CETELEM the largest consumer financier provides representation on about 30 Commissions while UNAF (the Union Nationale Des Associations Familiales) through its departmental organizations (UDAF) also has substantial representation on the Commissions. See N. Revenu, 'L'accompagnement social, pratique de l'institution familiale' (2010) 91 Réalités Familiales 44.
119. Discussion with the Bank of France suggests that interviews occurred in about 50 per cent of cases. See also Ferrière and Chatain, (2006) n 50 above, 23.22.
120. See Conseil Économique et Social (2007) n 52 above.
121. See Bank of France, Enquête Typologique 2007 at (last visited 8 August 2011) 23.
122. See Bank of France n 71 above, 3 indicating that a second application is primarily because of the end of provisional measures (49 per cent) with 29 per cent caused by a change in the economic situation of the debtor.
123. A study of over 4, 000 judgments under rétablissement personnel between 2003-05 indicated that over 50 per cent had liabilities under €7, 500 and 28 per cent liabilities under €1, 500, See Bourreau-Dubois, Chopard et al n 102 above.
124. The amount of income left to a debtor is determined by reference to wage attachment norms under the Labour Code and in order to ensure current living expenses cannot be less than the RMI (revenu minimum insertion) the minimum level of social security. See Code de la Consommation L 331-2. These provide floors but the Commission and courts have discretion to establish higher amounts. The establishment of the appropriate reste à vivre has been a continuing controversy with various modifications through regulatory decrees to attempt some standardization. See also discussion in Kilborn, n 7 above, 642-645.
125. See Cour des Comptes, n 6 above, 479.
126. The privileged nature of tax debts was abolished in 2003.
127. See L331-1 and see Ministère de l'èconomie des finances et de l'industrie, Circulaire relative à la procédure de traitement de surendettement des particuliers (November 2011).
128. Cour des Comptes, n 6 above, 491. To place these numbers in context the total number of employees of the Bank of England is just under 1800.
129. See Cour des Comptes, La Banque de France (2005) where it argues that managing over-indebtedness is not the task of the central bank and that no other central bank undertakes this role.
130. See discussion in Post, n 85 above.
131. See discussion of the role of interest groups in France in P. Rosanvallon, The Demands of Liberty: Civil Society in France since the Revolution (Cambridge, Mass: Harvard UP, 2007).
132. Chatriot notes this point, n 1 above, 109.
133. See Vigneau and Bourin, n 31 above, 14, who view the law as an extension of the administrative doctrine of imprévision.
134. As embodied in Civil Code, art 1134.
135. Cour de Cassation, n 97 above, 129.
136. These writers included Francois Gény, Emmanuel Gounot and Leon Duguit. See M. Claire Belleau, 'The "Juristes Inquiets": Legal Classicism and Criticism in Early Twentieth Century France' (1997) Utah LR 379; D. Kennedy, 'Two Globalizations of Law and Legal Thought 1850-1968' (2003) 36 Suffolk LR 631, 648 et seq; J.Cedras, 'Le Solidarisme contractual en doctrine et devant la cour de cassation' in Cour de Cassation Rapport Annuel 2003.
137. Cf Prosser, n 21 above.
138. See Gloukoviezoff, n 24 above, 229-230.
139. See S. Mudge, 'What is Neo-Liberalism?' (2008) 6 Socio-Economic Review 703.
140. See J. Bourdin, Accès des ménages au crédit en France (Paris: Sénat, 2006). See also the 2006 Report of the Consultative Committee on the Financial Sector available at (last visited 30 November 2011).
141. Assemblée Nationale Ist sess 2009-10 24 March 2010.
142. See J. Levy, 'Vice into Virtue? Progressive Politics and Welfare Reform in Continental Europe' (1999) 27 Politics and Society 239.
143. See M. Vail, Recasting Welfare Capitalism (Philadelphia: Temple UP, 2010).
144. See B. Palier and K. Thelen, 'Institutionalizing Dualism: Complementarities and Change in France and Germany' (2010) 38(1) Politics and Society 119, 134. The RMI will be altered through the progressive introduction of the RSA.
145. See Gloukoviezoff, n 4 above, 59.
146. See eg, Conseil économique et social, Le Surendettement des particuliers n 53 above, I-7.
147. At the end of 2008 the ratio of household debt to gross disposable income was 75 per cent in France, 160 per cent in the UK. See Economist Intelligence Unit, France Financial Services Report (2009). French levels of consumer credit are €2, 300 per capita compared with €4, 100 in the UK, €2, 800 in Germany and €8, 400 in Canada. See Athling Management, Pour un développement Responsable du crédit renouvelable (Rapport réalisé pour le Comité Consultatif du secteur Financier) (2008).
148. See M. Stephens, 'Mortgage Market Deregulation and its consequences' (2007) 22 Housing Studies 201.
149. Director General of Fair Trading, Over-Indebtedness (London: OFT, 1989) 8.
150. Insolvency Law and Practice, Report of the Review Committee (1982) (The Cork Committee) London HMSO cmnd 8558 para 272. See I Ramsay (ed), Debtors and Creditors: A Socio-Legal Perspective (Abingdon, Professional Books, 1986) ch 1.
151. See B. Carruthers and T. Halliday, Rescuing Business: The Making of Corporate Bankruptcy Law in England and the United States (Oxford: OUP, 1998) 383-400. In 1984 the White Paper on Insolvency Reform noted 'a considerable number of bankruptcies, especially where the debtor is a non-trader, in which total liabilities are relatively small and there is no real need for investigation. This was felt to be a considerable waste of resources ... where liabilities [are] under £15000 ... [the] Official Receiver should only be involved where this is unavoidable'. A Revised Framework for Insolvency Law Cm 9175 (London: DTI, 1984) para 120.
152. See Civil Justice Review: Report of the Review Body of Civil Justice cm 394 para 646 (London: HMSO, 1988).
153. 'There is understood to be considerable dragging of judicial heels as courts are reluctant to be inundated with debt cases': I. Gregory, 'Debtors have alternative choices to bankruptcy' The Independent 4 April 1992.
154. See E. Kempson and S., Managing Multiple Debts: Experiences of County Court Administration Orders Among Debtors, Creditors and Advisors (London: DCA, 2004) DCA Research Series 1/04. See also Department for Constitutional Affairs, Administration Order Reform Project, 'Who is using county court administration orders and debtor petitions? - Results and Methodology' (London: Department of Constitutional Affairs, 2003).
155. See eg R. Olins and H. Davidson, 'More and More pay the price in bankruptcy' The Sunday Times 14 March 1993, commenting that '[b]ankruptcy is a frequent and growing feature of Britain's longest recession for 60 years'; J. Wilcock, 'Survey sees no Respite from Bankruptcies' Upward Trend' The Guardian 14 November 1992.
156. I. Gregory, 'Big Rise in Applications for Personal Bankruptcy' The Independent 31 March 1992.
157. See Justice, Insolvency Law: An Agenda for Reform (London, Justice, 1994) 15.
158. For example debtor petitions represented 84 per cent of petitions in early 2011. Insolvency Service statistics at (last visited 30 November 2010).
159. Insolvency Act 1986, Part XIV.
160. See the historical account in V. Markham Lester, Victorian Insolvency: Bankruptcy Imprisonment for Debt, And Company Winding Up in Nineteenth Century England (Oxford: OUP, 1995) 292 estimating that small commercial cases requiring official involvement represented 81-86 per cent of total annual bankruptcies.
161. See discussion of pre Enterprise Act developments in Ramsay, n 24 above.
162. See Insolvency Service, Bankruptcy: Proposals for Reform of the Debtor Petition Process (London: Insolvency Service, 2007) 34.
163. The Service currently separates bankruptcies into three categories: type 0 - no interview: type 1 - telephone interview or in some cases a short face-to-face interview; type 2 - all other cases. Over two-thirds of contemporary bankruptcy cases are in type 1 (Information provided by Insolvency Service). See Insolvency Service, Case Manual: Initial Contact Those on Debt Relief Orders will not be interviewed. (last visited 30 November 2011).
164. See Insolvency Service, Enterprise Act 2002: The Personal Insolvency Provisions: Final Evaluation Report November 2007 (London: Insolvency Service, 2008).
165. Insolvency Service, n 167 above, 4.
166. Insolvency Service, Profiles of Bankrupts: 2005/06 to 2007/08, 2.
167. HM Treasury, Managing Public Money (London: Treasury, 2007) ch 6.
168. HM Treasury, DBIS, Managing Borrowing and Dealing with Debt (London: TSO, 2010) para 74.
169. Ironically many debtors borrow money to pay the deposit. See Insolvency Service, Survey of Debtors Petitioning for Bankruptcy (2007) figure 14. The requirement of a fee was challenged unsuccessfully under article 6 of the European Convention on Human Rights as restricting a fundamental right of access to courts. See R v Lord Chancellor ex part Lightfoot [2000] 2 WLR 318. Individuals may also have to pay a court fee (approximately £175), which may be remitted.
170. A common theme in responses to the Insolvency Service consultation on the White Paper Bankruptcy: A Fresh Start (London: The Insolvency Service, 2000) was that 'while there is agreement that the proposals would increase risk taking and entrepreneurship, it was felt that risk-taking by consumers was undesirable and bankruptcy should not be an easy option in this case'. See Summary of Responses to White Paper available at (last visited 1 December 2011).
171. See HC Parl Deb Standing Committee B Enterprise Bill Col 628 May 2002, M. Waterson moving amendment No 455.
172. UK HC Parliamentary Debates Col 61 (17 June 2002) (Ms Melanie Johson)
173. See Insolvency Service, Consultation Document on IVA Regime (2007).
174. Cork, n 159 above, para 365.
175. For a full discussion of the development of the IVA as a consumer remedy see Walters, n 15 above and M. Green, 'New Labour-More Debt, The Political Response' in J. Niemi, I. Ramsay and W. Whitford (eds), Consumer Credit, Debt and Bankruptcy: Comparative and International Perspectives (Oxford: Hart, 2009).
176. Walters, 30-31; Green, 408-409.
177. See relevant documents on development of IVA protocol at (last visited 30 November 2011).
178. Tribe et al conducted a pilot study in 2005 (J. Tribe, 'Bankruptcy Courts Survey 2005: A Pilot Study Final Report: January 2006' Kingston Business School Occasional Paper No 59 at (last visited 1 December 2011), but its very low response rate and some limits in methodology mean that its findings must be treated with caution.
179. See Insolvency Service, Characteristics of a Bankrupt (2008); Profiles of Bankrupts 2005/6 to 2007/8 (London: Insolvency Service, 2009).
180. See Insolvency Service, Annual Report and Accounts 2009-10, 12-13 (London: Insolvency Service, 2010).
181. Insolvency Service, DBIS, Debt Relief Orders: Preliminary Evaluation (London, TSO, 2010).
182. st Century Debtor (London: Price Waterhouse Coopers, 2006); M. Green, n 180 above.
183. See Collard, n 15 above.
184. M. Castells, End of Millenium, The Information Age: Economy Society and Culture (Oxford: Blackwell, 1998) 345.
185. Levels of consumer and household credit in France are approximately 50 per cent of the UK level. See Economist Intelligence Unit, n 154 above. For further explanations for differences in bankruptcy rates see R. Mann, 'Making Sense of Nation-Level Bankruptcy Filing Rates' in Niemi, Ramsay and Whitford, n 180 above ch 11.
186. See studies cited in I. Ramsay, Consumer Law and Policy: Text and Materials on Regulating Consumer Markets (Oxford: Hart, 2nd ed, 2007) 578-579.
187. National Consumer Council, Consumers and Debt (London: NCC, 1982) 3.
188. See R. Berthoud and E. Kempson, Credit and Debt: The PSI Report (London: PSI, 1992).
189. S. Bridges and R. Disney, 'Use of Credit and Arrears on Debt among Low-Income Families in the United Kingdom' (2004) 25 Fiscal Studies 1.
190. See Parliamentary Under Secretary of State for Business, Innovation and Skills (Mr Edward Davey) HC Deb 9 November 2010 c7-8WS. See also DTI/Insolvency Service, Relief for the Indebted - An Alternative to Bankruptcy (London: Insolvency Service, 2005).
191. See eg Insolvency - A Second Chance Cm 5324 DTI/The Insolvency Service (2000); HM Treasury, DBIS, n 173 above, para 67.
192. See I. Ramsay, 'Wannabe WAGS and 'Credit Binges': the Construction of Overindebtedness in the UK in Niemi, Ramsay and Whitford n 180 above, 76.
193. See Insolvency Service, n 184 above, 19.
194. See eg, T. Williams, 'Empowerment of Whom and for What? Financial Literacy Education and the New Regulation of Consumer Financial Services' (2007) 29 Law and Policy 226.
195. th ed, 1773) ii. 473.
196. rd series (1860) clvii 682 quoted in V. Markham Lester, n 165 above, 136.
197. th ed, 2009) at para 11-023 et seq. In 2010 the Insolvency Service made 351 allegations against bankrupts of 'incurring debt without reasonable expectation of payment'. Insolvency Service, Annual Report 2010-11, 34.
198. See BIS and Treasury, n 173 above.
199. See Carruthers and Halliday n 156 above, 139.
200. National Audit Office n 6 above, 7.
201. See I. D. C. Ramsay, 'Interest Groups and Consumer Bankruptcy Reform' (2003) 53 University of Toronto LJ 379.
202. See Insolvency Service website for details of the IVA Standing Committee and the Protocols at (last visited 30 November 2011). Only one of the 13 members represents consumers (Citizens Advice).
203. Insolvency Service Statistics available at (last visited 2 August 2011).
204. The Insolvency Practices Council has criticized the absence of evidence on the success of IVAs. See Insolvency Practices Council, Annual Report (2009).
205. For example Max Recovery, a subsidiary of JP Morgan which operates in the US, UK, Australia and Canada.
206. See E. Kempson, Money Advice and Debt Counselling (London: PSI, 1995).
207. Ministry of Justice, DBIS, Debt Management Schemes-Delivering Effective and Balanced Solutions for Debtors and Creditors (London: TSO, 2009).
208. See OFT, Debt Management Compliance Review (London: Office of Fair Trading, 2010).
209. ibid and see OFT, Debt management (and credit repair services) guidance A consultation (London, 2011). In January 2011 the OFT announced that '35 debt management firms have surrendered their consumer credit licences and at least 15 are facing licensing action as a result of an OFT compliance review.' Available at (last visited 30 November 2011).
210. La Porta et al n 26 above. For a rejection of the legal origins literature as an explanation of the development of bankruptcy law see J. Sgard, 'Do legal origins matter? The case of bankruptcy laws in Europe 1808-1914' (2006) 10 European Review of Economic History 389.
211. See eg, C. Tabb, 'Lessons from the Globalization of Consumer Bankruptcy' (2005) 30 Law & Soc Inquiry 763.
212. Abolished in the Administration of Justice Act 1970.
213. R. Michaels, 'The Functional Method of Comparative Law' in M. Reimann and R. Zimmernan (eds), The Oxford Handbook of Comparative Law (Oxford: OUP, 2006).
214. R. Unger, What Should Legal Analysis Become? (London: Verso, 1996) 127.