On March 31, 2024, 15 years of the provisions regulating the so-called consumer bankruptcy. The introduced regulations were a response to the need to provide indebted natural persons, who are not entrepreneurs, with a chance to declare bankruptcy and have a new start in life.
The evolution of consumer bankruptcy
The regulations have undergone many amendments, the above-mentioned 15 years can be divided into 3 main sub-periods:
- 2009-2015 – in the first period, the number of announced consumer bankruptcies was very small, which was due to very strict conditions for announcing such bankruptcy, such a situation was far from desirable, because the demand for this regulation was very high and resulted from the progressive adjustment of the Polish economy to the Western model,
- 2016-2020 – in 2016, the Restructuring Law came into force; this huge qualitative change in the Polish legal system also resulted in many changes in the Bankruptcy Law; one of them was the liberalization of consumer bankruptcy regulations; as a result of the changes, the number of cases has significantly increased,
- from 2020 – a significant improvement in the functioning of consumer bankruptcies was insufficient in the eyes of the legislator, who in 2020 decided on a major amendment to the regulations, which further liberalized the existing solutions; As a result of the change, there was another, even sudden increase in announced consumer bankruptcies.
Statistics
Since the changes introduced in 2020, the number of consumer bankruptcies in Poland has been record-breaking (although still relatively lower than in Western countries). The year 2023 ended with a record number of 21,000. consumer bankruptcies. In March 2024, 1.8 thousand were announced. consumer bankruptcies. These numbers are impressive. It is expected that in the coming years we will record further increases in the number of consumer bankruptcies. Such trends result from the increase in consumerism, which is strongly promoted in media messages, especially in social media. Living beyond one’s means is one of the most common causes of insolvency. These factors are compounded by the changing economic situation in Poland – increasing uncertainty on the labor market, price increases caused by inflation in 2022-2023.
Consumer bankruptcy is necessary
Our legal culture still applies the principle of pacta sunt servanda (Latin: contracts must be kept), although research shows that Poles are becoming more and more relaxed about it. Paradoxically, although this very important principle is severely limited (and sometimes even broken) in consumer bankruptcy, bankruptcy, including consumer bankruptcy, is an important element of the free market economy. It can be concluded that the exception proves the rule, so systemic bankruptcy strengthens the market and the reliability of its participants. Therefore, there is no economic development without bankruptcy. There are also arguments of a social nature in favor of bankruptcy, and in particular consumer bankruptcy with the possibility of discharge of liabilities, especially those about ensuring a fresh start, getting the debtor out of the so-called the gray zone to which he would otherwise be condemned.
Progressive liberalization of regulations
It seems that the liberalization of consumer bankruptcy regulations has gone a bit too far. It is primarily about assessing the so-called payment morality, or rather the moment at which it is assessed. Until 2020, the lack of it, resulting from, for example, intentional indebtedness without the intention to repay the liabilities, was the basis for refusing to declare bankruptcy. This made it possible to weed out debtors at the initial stage who, for certain reasons, do not deserve to benefit from its benefits, in particular the write-off of liabilities. From 2020, anyone can go bankrupt – it is practically impossible to file a bankruptcy petition that will be dismissed. But beware, payment morality is still examined, only at the end of the proceedings. Each debtor may therefore go bankrupt, lose all his property, but ultimately be left with unpaid debts. This is justified in some cases, but often consumers who decide to file for bankruptcy are not aware of this risk. Unfortunately, this is largely due to the actions of dishonest service providers (not always lawyers) who sell consumer bankruptcy as a cure for every debt problem.
Education and more education
For the efficient operation of the consumer bankruptcy system, in addition to efficient courts and trustees, high social awareness is needed. Consumer bankruptcy cannot be forced wholesale on debtors, often thoughtlessly. Properly aware debtors will be more difficult to persuade into unnecessary bankruptcy.
It seems that in the short term, the activity of bankruptcy law practitioners is crucial, in particular in providing reliable information to clients about the advantages and disadvantages of the proposed solutions. Any entities forcing consumer bankruptcy should face social ostracism. In the long term, changes in personal finance education (or rather its introduction) are needed. A society that consciously functions in a modern country must have appropriate knowledge in this area. Increasing social awareness of the problem of debt and how to deal with it is one of the key modern competencies.
