'Short a Few Quid': Bankruptcy Stigma in Contemporary Australia

48 Pages Posted: 8 Dec 2015

See all articles by Paul Ali

Paul Ali

University of Melbourne - Law School

Lucinda O'Brien

Melbourne Law School

Ian Ramsay

Melbourne Law School - University of Melbourne

Date Written: December 8, 2015

Abstract

Bankruptcy has always been a source of significant stigma. The first Elizabethan statutes regarded bankruptcy as a quasi-criminal state, punishable by public shaming, imprisonment and, in some cases, death. More modern regimes have recognised that bankruptcy serves important economic objectives, by encouraging entrepreneurial risk-taking and offering rehabilitation to debtors with useful skills and productive capacity. Over the course of the nineteenth century, the laws of the United States and United Kingdom became more liberal and less morally prescriptive in their treatment of financial failure. The early laws of the Australian colonies took a similarly pragmatic approach, and the current federal Bankruptcy Act 1966 continues in this vein. Still, bankruptcy remains a source of considerable stigma in Australian society, fuelled by political discourse, judicial decisions and media accounts of high-profile bankrupts. Noting that bankruptcy stigma has received little scholarly attention in Australia, the authors draw on parliamentary debates, court judgments, media reports, and other sources to provide an account of bankruptcy stigma in contemporary Australia. The authors examine the UK’s recent efforts to address bankruptcy stigma by way of legislation, and consider several factors that may undermine such efforts. The authors conclude by calling for a wider public discussion about rising levels of household debt – one that would reframe bankruptcy as a social issue, rather than just a matter of personal morality.

Keywords: Bankruptcy, stigma

Suggested Citation

Ali, Paul and O'Brien, Lucinda and Ramsay, Ian, 'Short a Few Quid': Bankruptcy Stigma in Contemporary Australia (December 8, 2015). University of New South Wales Law Journal, Vol. 38, No. 4, 1575-1613, 2015. Available at SSRN: https://ssrn.com/abstract=2700544

Paul Ali

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 1088 (Phone)
+61 3 8344 5285 (Fax)

HOME PAGE: http://www.law.unimelb.edu.au

Lucinda O'Brien

Melbourne Law School ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

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