1 - Introduction

Summary

What is this book about?

This book is about the lived experience of bankruptcy and the role that debt relief plays as a form of welfare protection. If you have ever wondered what it is like to go bankrupt, then this book will answer at least some of your questions. By using the lens of lived experience, we will see the process from start to finish through the eyes of people with mortgage debt – from the day they get the keys to their new house, to falling into distress, how they go about seeking advice, applying to go insolvent and what then happens afterwards. The Irish situation is offered as a case study, with comparisons made to the UK and US contexts because these countries heavily influenced the recent Irish insolvency reforms of 2012 (Spooner 2018, 2019). Indeed, while bankruptcy was once a rare phenomenon, aimed at businesses and traders, such legal reforms along with changing social attitudes have made it more common for individuals. This is also a reflection of a changed economy: a century ago, most consumer borrowing was for luxury or non-essential goods (Geisst 2013), while today you can defer payment on a ￡5 supermarket pizza through a buy now pay later financing scheme (Cooke 2022).

The Global Financial Crisis (GFC) of 2007/2008 ignited interest in debt and credit across society (Graeber 2011). Yet I remain surprised that comparatively few accounts of debt include a discussion of debt relief, because we are positively drowning in debt and for many people it represents the only way out. Debt distress is associated with a whole range of negative socioeconomic indicators including relationship breakdown (Porter and Thorne 2006), unemployment (or underemployment) (Ramsay 2017; Debt Collective 2020), and poor mental/physical health (Davies et al 2015; James 2022). This is not even to mention the economic drag created by growing debt burdens and higher interest rates, meaning that people in debt have less and less to spend in the consumer economy (Spooner 2019; Davis and Cartwright 2020; Pope 2021). We are also borrowing for things that were formerly either free or at least heavily subsidized by the state, a trend that has led to the term ‘loans for wages’ being coined (Crouch 2011; Featherstone 2020).