Expert Recommendations and the Evolution of European Best Practices for the Treatment of Overindebtedness, 1984-2010

Abstract

A series of European experts have weighed in over the past twenty years on the proper way forward for preventing and treating consumer overindebtedness. This paper applies these expert recommendations in an analysis of the multitude of laws establishing (and revising) formal debt adjustment systems in Europe, from the first, in Denmark in 1984, to the most recent, in Greece at the end of July 2010. It first traces and describes in detail the context and content of the various expert recommendations with respect to best practices in treating overindebtedness. Then, it identifies their shared core and tracks their correspondence with the evolving contours of European laws on debt adjustment and overindebtedness relief. The most common shared recommendations are broken into conceptual parts, with detailed examples of how national laws have taken action, advertently or inadvertently consistent with the experts' views, especially in cases where the original laws failed to heed potential dangers and were later reformed to address emerging problems. Areas where some national laws still lag behind the experts' suggestions are pointed out, as well, in order to "hold their feet to the fire" and challenge the makers of lagging legal policy to update their laws to the state of the art. Like many of the recommendations that it examines, this paper is designed to inform and guide future policy makers as overindebtedness law continues its rapid and dynamic evolution, both within Europe and beyond.