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Different Statues- On the Necessity of Separate Legislation of Personal and Corporate Bankruptcy Law

Author(s)

Hongyuan Zhang

Affiliation(s)

Law School, The University of Sydney, Sydney 2050, Australia

Abstract

Within the framework of the existing bankruptcy legal system, there are a series of differences in the classification of bankruptcy law in various states, such as New Zealand, Australia and Canada. The focus of this “classification” is “whether it is necessary to distinguish between the the legal provisions of the personal bankruptcy and corporate bankruptcy in terms of legislation and justice, which is also one of the hot topics in legal circles. At least for now, a popular trend seems to be to dismiss such “distinction”, which is “looking the insolvency legal system as a whole”. If we just observe it from the perspective of legal logic, this view has its rationality on a certain extent. However, as long as we combine the legal theory with the practice, we will find that there are a series of crucial differences between personal and corporate bankruptcy both at the theoretical level and in the approach of reasoning when coping with the relevant cases (for example, corporate bankruptcy needs to be differentiated based on the size of the enterprises, personal bankruptcy should consider the basic survival of the debtor in addition to the repayment of the debts.) Such crucial differences make it impossible to forcibly unify these two (personal and corporate bankruptcy law) in one legal system; Otherwise, on the one hand, there will be the unnecessary costs of re-legislation. On the other hand, it will also cause unnecessary to the parties (whether individuals or enterprises) and judges to make judgments in judicial practice. Therefore, based on the above opinions, the essay will demonstrate the distinctions between personal and corporate bankruptcy law, with the aim of explaining a conclusion: personal bankruptcy and corporate bankruptcy are two completely different systems; Therefore, in terms of legislation, not only should these two not be unified, but also needs to be further distinguished on the basis of the existing law.

Keywords

Bankruptcy Law; Corporate Bankruptcy; Personal Bankruptcy; SMEs (Small and Medium-Sized Enterprises); Debtor`s Basic Survival

References

[1] Dr Rosalind Mason, Private capacity, Committee Hansard, 1 March 2023. [2] Australian Restructuring Insolvency and Turnaround Association (ARITA), Supplementary Submission 36.1. [3] Thomas H. Jackson, The logic and limits of bankruptcy law (Harvard University Press, 1986) [4] Parliament of Australia, Corporate Insolvency in Australia, p. 80. [5] Warren E. ‘Bankruptcy Policy’ [J]. The University of Chicago Law Review, (1987), 54 (3).