Involuntary Bankruptcy as Debt Collection: Multi-Jurisdictional Lessons in Choosing the Right Tool for the Job

24 Pages Posted: 5 Nov 2012 Last revised: 26 Nov 2012

See all articles by Jason J. Kilborn

Jason J. Kilborn

University of Illinois Chicago School of Law

Adrian Walters

Chicago-Kent College of Law - Illinois Institute of Technology

Date Written: November 5, 2012

Abstract

This paper contrasts the usage of creditor-initiated or 'involuntary' bankruptcy in England, the Netherlands and the United States, and it presents empirical evidence to reveal and explain stark divergences among these three otherwise very similar systems. US practice is consistent with the hypothesis that involuntary bankruptcy should represent a rare exception to the ordinary process of individual claims enforcement. Elevated levels of involuntary bankruptcy in England and the Netherlands pose a theoretical and practical conundrum. Analysis of empirical data suggests that involuntary bankruptcy is commonly used in England and the Netherlands for deleterious purposes inconsistent with the modern goals of bankruptcy. These discoveries suggest that policymakers should consider restricting involuntary bankruptcy in a variety of ways, especially against individual, natural person debtors.

Keywords: bankruptcy, involuntary, debt collection, creditors rights, judgment enforcement, civil procedure

Suggested Citation

Kilborn, Jason J. and Walters, Adrian, Involuntary Bankruptcy as Debt Collection: Multi-Jurisdictional Lessons in Choosing the Right Tool for the Job (November 5, 2012). Chicago-Kent College of Law Research Paper No. 2012-15, Available at SSRN: https://ssrn.com/abstract=2171441 or http://dx.doi.org/10.2139/ssrn.2171441

Jason J. Kilborn (Contact Author)

University of Illinois Chicago School of Law ( email )

300 S. State Street
Chicago, IL 60604
United States

Adrian Walters

Chicago-Kent College of Law - Illinois Institute of Technology ( email )

565 W. Adams St.
Chicago, IL 60661-3691
United States

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