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The Father of Consumer Bankruptcy in Continental Europe?

posted by Jason Kilborn

I hope some kind CreditSlips reader can confirm (or at least not disprove) what I believe to be my recent exciting discovery. For nearly a decade, I've searched for the stone that caused the very first ripple that became the wave of consumer bankruptcy (i.e., discharge) laws across continental Europe in the 1980s and 1990s, and I think I've found it. Thanks to extraordinary help from Ulrik Rammeskow Bang-Pedersen at the University of Copenhagen, I've identified what I believe to be the first published suggestion that a continental European nation should adopt a specific regime of coercive debt reduction (discharge) for consumers. The comment appeared in a Danish law journal in January 1972, and it was written by a barrister named Frederik Bang Olsen (father of Peter Bang-Olsen, a current lawyer at what formerly was the Bang-Olsen firm, now Ret&RådAdvokater--thanks, Peter, for the background info!). One can clearly trace the development from this comment into a private law reform initiative and report that led to the adoption of the Danish debt adjustment act in May 1984 (the first consumer insolvency law in continental Europe--influenced, but not very powerfully, by the earlier laws in England and the United States).

I have found discussions of debt relief and discharge in other European countries beginning in the 1980s and later, but never anything as early as 1972. France adopted the second consumer debt relief law on the continent on December 31, 1989, but it contained no general discharge provision (yet), and I have not found any evidence that discussions of that law began before the early 1980s. This would explain my fascination (obsession?) with European consumer bankruptcy, as both it and I were born in 1972.

So, three cheers for the father of European consumer bankruptcy, Frederik Bang Olsen! What an amazing story of grass-roots initiative that finally moved past a centuries-old rule (pacta sunt servanda) and changed the world for the better for countless others to follow. Inspiring!


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