A Human Rights Framework for Debt Relief

Abstract

This project begins to answer the question: How might human rights obligations and standards inform lawmaking around the treatment of over-indebted individuals? Recently, policymakers in Europe have articulated a desire to incorporate human rights principles in their responses to consumer over-indebtedness. However, beyond a handful of vague references, there has been no analysis of how human rights principles might inform the treatment of over-indebtedness. This paper analyzes the human rights that are implicated in the treatment of over-indebtedness and discusses how each right can be adequately taken into account in crafting consumer insolvency regimes. In undertaking this analysis, I suggest that a human rights based evaluation of nations’ insolvency systems or lack thereof must be contextualized in nations’ background rules including 1) the available social safety net, 2) the nature of consumer credit contracts that default laws permit to exist, and 3) permissible collection methods. This project should be useful for two groups: 1) those drafting or proposing legislation addressing consumer over-indebtedness who are members of countries that have undertaken specific human rights obligations, and 2) lawmakers or policymakers who wish their proposed legislation to reflect cognizance of human rights principles even when not obligatory.

Keywords: debt, bankruptcy, insolvency, human rights