Niemi, Johanna --- "Personal Insolvency" [2010] ELECD 179; in Howells, Geraint; Ramsay, Iain; Wihelmsson, Thomas; Kraft, David (eds), "Handbook of Research on International Consumer Law" (Edward Elgar Publishing, 2010)

Book Title: Handbook of Research on International Consumer Law

Editor(s): Howells, Geraint; Ramsay, Iain; Wihelmsson, Thomas; Kraft, David

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847201287

Section: Chapter 14

Section Title: Personal Insolvency

Author(s): Niemi, Johanna

Number of pages: 22

Extract:

14. Personal insolvency
Johanna Niemi



At the end of every seven years thou shalt make a release. And this is the manner
of the release: Every creditor that lendeth ought unto his neighbour shall release it;
he shall not exact it of his neighbour, or of his brother because it is called the Lord's
release. (Deuteronomy 15:1­2)

1. Introduction
We can hardly imagine a contemporary society without credit. Credit
contributes in many ways to the economic growth of most societies. With
credit, many households are able to improve their housing and living standards
and to move their consumption forward to those phases of life when their
needs are most pressing. We can even say that credit plays an important role
in evening out consumption patterns across the generational cycle.1
The dark side of consumer credit is the risk of not being able to pay back.
Credit is based on the expectation of future performance and, thus, always
bound with risk. With the growth of credit, the occurrence of risk also
becomes more frequent, even if only a small fraction of all debtors fail to pay
back. Today, consumer debt problems occur on a large scale. Different
measurements give different figures, but it is estimated that almost one fifth of
European households experienced serious debt problems already before the
current debt crisis.2
Debt problems can mean different things. Most people have experience of
trouble in paying back ­ and most of them have sorted out their problem ...