The over-indebtedness of European consumers: time for a ‘fresh-start’ of the EU policy and legal agenda?

Ferretti, Federico

doi:10.1515/ercl-2015-0021

Cited by 3 publications

(2 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…215-216). The MCD, in comparison with the CCD, illustrates this parallel development with its stricter requirements regarding the creditworthiness assessment and the decision to deny credit, and also new provisions regarding default and foreclosure (Cherednychenko 2014;Cherednychenko and Meindertsma 2019;Ferretti 2015;Ramsay 2016).…”

Section: Policy Discussionmentioning

confidence: 99%

Compensation and Socio-Economic Status of Borrowers in Foreclosure: Evidence from Swedish Micro-data

Lundholm

2020

J Consum Policy

View full text Add to dashboard Cite

Proper compensation during foreclosure is essential to any effort to protect borrowers as consumers. However, the effectiveness of consumer protection and other safety nets during foreclosure has been debated within academia. This study contributes to this debate by exploring socio-economic group differences related to the compensatory potential of foreclosure proceedings. It employs micro-level data on foreclosure auctions in Sweden from 2000 to 2014. The results indicate that there is a correlation between high socio-economic status and a greater potential for compensation and that this is likely not explained by appraiser bias. This article discusses these empirical findings in terms of the need for strict consumer protection regulation and other safety nets, such as alternative mortgage products or debt relief, to ensure that there is a potential for compensation for all borrowers in foreclosure, regardless of socio-economic status.

show abstract

Section: Policy Discussionmentioning

confidence: 99%

Compensation and Socio-Economic Status of Borrowers in Foreclosure: Evidence from Swedish Micro-data

Lundholm

2020

J Consum Policy

View full text Add to dashboard Cite

show abstract

“…180 Traditionally, consumer over-indebtedness has been associated with excessive borrowing or excessive lending by financial institutions. 181 It is even said that insolvency is a phenomenon that only occurs in societies in which credit is widespread, and that without credit, there is no insolvency, nor need for an insolvency regime. 182 The increased use of credit is also relevant for entrepreneurs, as the availability of credit allows them to involve more stakeholders in their business activities.…”

Section: Risk-taking As a Cause Of Insolvency…mentioning

confidence: 99%

Natural person ltd.: Towards a unified discharge regime for entrepreneurs and consumers

Vandenbossche

2023

Intl Insolvency Rev

View full text Add to dashboard Cite

Personal insolvency proceedings are increasingly fulfilling an economic function, aimed at the rehabilitation of the debtor. The idea of the fresh start and second chance, including an early discharge of residual debts, is an important illustration thereof. Despite the fact that this evolution is noted in all personal insolvency procedures, both with regard to entrepreneurs and consumers, debt discharge used to be easier to justify and more readily granted to entrepreneurs (traders) than to non‐entrepreneurs. Clear examples of the discomfort legislators seem to have with discharging unpaid debts of consumers are the EU Member States that differentiate between commercial and consumer insolvency procedures. In addition, the narrative of promoting entrepreneurship is now driving EU insolvency reforms. That (narrow) focus leads Directive 2019/1023/EU to make the same distinction between insolvent individual entrepreneurs and other natural persons, offering the former a full discharge of debt after a reasonable period of time, while providing no mandatory discharge principles for the latter. This means that not all natural persons are equal when it comes to the possibility of having a second chance, despite compelling evidence that shorter discharge periods lead to more productive individuals. The question therefore arises as to whether EU Member States should run separate discharge systems for entrepreneurs and consumers, and whether this is justified in relation to its purpose. Focusing on natural persons in an insolvency context, this article argues that the objectives of providing a fresh start and second chance, by promoting debt discharge, are as relevant for consumer debtors as they are for entrepreneurs.

show abstract

Investor-Consumer or Overall Welfare: Searching for the Paradigm of Recent Reforms in Financial Services Contracts

Grundmann

Esposito²

2017

SSRN Journal

View full text Add to dashboard Cite

This article challenges the assumption that from an economic perspective the distribution of value (be it surplus or well-being) between parties in voluntary transactions matters at most for instrumental reasons-that is, for increasing the size of the pie. This assumption is probably the stronghold of institutional economics and traditional law and economics which most blatantly deviates from any legal perspective. A strain of economic literature going back at least to Adam Smith conceives of market relations as principal-agents relations between consumers and producers. As consumer welfare is not the only societal value, conflicts with other values can justify its sacrifice in some occasions. A just society cannot be reduced to an allocatively optimal general equilibrium. This article focuses on the development of two arguments in support of this framework. First, a coherence (or conceptual) argument. There is an astonishingly unexplored connection between the role of the consumer on the market and the investor in the firm-not to be confused with the "producers are consumers too" argument. Second, we build a principal multi agent framework where aggregate consumer welfare is the principal and consumers, entrepreneurs and the legal system are the agent. With this framework, we offer an explanation of central elements of the recently reformed EU financial services system, in particular fiduciary duties and the duty of responsible lending.

show abstract

The over-indebtedness of European consumers: time for a ‘fresh-start’ of the EU policy and legal agenda?

Cited by 3 publications

References 0 publications

Compensation and Socio-Economic Status of Borrowers in Foreclosure: Evidence from Swedish Micro-data

Compensation and Socio-Economic Status of Borrowers in Foreclosure: Evidence from Swedish Micro-data

Natural person ltd.: Towards a unified discharge regime for entrepreneurs and consumers

Investor-Consumer or Overall Welfare: Searching for the Paradigm of Recent Reforms in Financial Services Contracts

Contact Info

Product

Resources

About