Do the bankruptcy laws of England & Wales adequately protect debtors’ human rights who suffer mental illness?

Abstract

Striking the correct balance of interest amongst creditors and debtors is an underlying objective of insolvency law and practice. However, in the last three decades, the attitudes towards debt, risk and rewards have shifted significantly in favour of a debtor. The financial crises of 2008 and the COVID-19 pandemic exposed the vulnerability of a debtor who requires adequate protection and certainty that their rights will be protected by all means. The available safety net for debtors in England & Wales through the regulatory and statutory framework protects debtors are insufficient. The parallels system of the international debt relief framework, which comprises international treaties and conventions to which the United Kingdom is party grants certain rights to the debtor to maintain dignity and respect. Debtors confront many challenges during the life cycle of their debt. Discrimination, mental stress, fear of losing a home, and the societal stigma of bankruptcy and exclusion are the prime issues a debtor faces daily. It is now evident that debt and bankruptcy create both physical and mental problems for a debtor. The Supreme Court decisions in Manchester CC v Pinnock and Hounslow CC v Powell examine the potential impact of Article 8 of the European Convention on Human Rights and Fundamental Freedoms on protecting the home in creditor repossession proceedings. However, under Article 8, occupiers may have an independent right to respect for their home, which should be recognised in the legal frameworks governing creditor’s enforcement rights against the home. Common symptoms of mental health problems, such as low motivation, untrustworthy memory, limited concentration, and diminished planning and problem-solving abilities, can make it difficult for people to be engaged consumers and advocate for themselves, particularly when they are in debt.