Leiden University examines benefits and necessity of personal bankruptcies
Not only companies go bankrupt, many people do too. Are bankruptcies beneficial for natural persons, and do they give people the new start they need? Leiden University will examine these questions in collaboration with SEO Amsterdam Economics.
The research has been commissioned by the Research and Documentation Centre (WODC) of the Ministry of Justice and Security in the Netherlands. Together with SEO Amsterdam Economics, the Department of Company Law and Financial Law at Leiden University will study the benefit and necessity of bankruptcies in the case of natural persons. 'Natural persons' refers to individuals, as opposed to 'legal entities', which also include companies or foundations.
There is a lot of attention in society and politics for natural persons who have got into serious debt. Recent research shows that around 726,000 families in the Netherlands are facing financial problems. Various laws and regulations are trying to help these people solve their debt problems.
The aim of the project is to study whether bankruptcy is still effective in practice when it comes to natural persons. If so, in which cases, and if not, how could bankruptcy be made more effective for natural persons? Should the Bankruptcy Act be amended to give these people a new start?