The concept of a fresh start in the discharge of debt procedure in European Union insolvency law

Abstract

A fresh start is the essence of personal insolvency proceedings. In the last few decades, policymakers in the United States of America and European countries have focused on establishing effective and efficient insolvency proceedings which would address the particular needs of insolvent natural persons. Previously, personal insolvency proceedings aimed to address the social and economic problems of insolvent debtors (consumers) which were not able to meet their financial obligations in time. However, the latest developments in this area reveal that specific rules should be established in insolvency law to tackle the insolvency problems of individuals who incur most of their debts from economic activities (entrepreneurs’ insolvency). The adoption of the Directive on Restructuring and Insolvency is the first attempt in European Union law to counter the challenges of the insolvency of entrepreneurs. This article analyses the main elements of a fresh start in European Union insolvency law, how this phenomenon has evolved and whether the European Union insolvency law provides an effective fresh start for insolvent entrepreneurs.