Personal insolvency

AuthorDiana Deleanu
PositionLecturer Professor Diana Deleanu, PhD Candidate, The Faculty of Social and Administrative Studies, 'Nicolae Titulescu' University of Bucharest (e-mail:
In 2014 a d raft bill on personal insolvency reached public debate, stirring controversy in both
financial and academic environment. The current paper aims at analyzing the merits and weak points
of the draft bill.
Keywords: insolvency, debtor, creditor, restructuring, bankruptcy.
1. Introduction*
The international insolvency
proceedings’ regulation extends now not
only to trade entities, but also to the
municipal and individual proceedings.
Many European countries have a long
standing practice in restructuring the
financial situation for individuals who are
unable to efficiently cover their debts.
2. Content
Personal insolvency, also known as
"personal bankruptcy" (which is
scientifically inaccurate) has been
generating significant doctrine and ethical
controversy, even in jurisdictions with an
old and constant practice. The inaccurac y
comes from the fact that traditionally-the
notion of bankruptcy proceedings ends with
the dissolution / liquidation of the entity
(such as in trade companies’ case). Of
course, this rule could not apply
accordingly in insolvent individuals.
Therefore, this notion appeared from
the need to protect the indebted citizen, a
more understanding approach than the one
* Lecturer Professor Diana Deleanu, PhD Candidate, The Faculty of Social and Administrative Studies, ”Nicolae
Titulescu” University of Bucharest (e-mail:
which characterized the nineteenth century:
the debtors prison.
Almost two centuries ago, in order to
obtain a bank loan, Romanian traders had to
be registered with the Trad e Register, to be
debt-free and not been sentenced to the
debtors' prison.
The drastic approach from the
nineteenth century (which characterized
that historical time) left a strong imprint on
society, as we see it reflected even in the
literature of the time. The work of Charles
Dickens would have clearly had another
profile, would the author not been scarred
as a child by his family’s sentence in the
debtors prison, after unnecessary expenses
his parents made.
Therefore, individual ins olvency
requires a 'personal' approach, different
from the "technical" one (appliccable to
trade companies) because the regulatio n
borderline touches upon individual rights
and freedom and because, without aiming at
that, the proceedings also affect the rights of
third-party individuals, who need not be
We cannot help wondering if
regulating this procedure isn’t a form of
legislative regression after the human

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