The Construction Of Personal Bankruptcy System In China From The Perspective Of Law And Economics

Giving individuals the ability to go bankrupt is a prerequisite for constructing a personal bankruptcy system,a manifestation of the equal status of market subjects,and a need to maintain stable social development.The absence of a personal bankruptcy system may cause individuals to be unable to exit the market in accordance with a scientific system when they are in debt distress and lose their ability to pay,which in turn leads to chaotic lending relationships and interferes with social and economic development.In order to solve the above problems,many scholars have proposed that China should establish a personal bankruptcy system,but some people worry that the personal bankruptcy system will become a tool for debtors to maliciously evade debts and fail to protect the interests of creditors.In this context,how to construct a reasonable personal bankruptcy system is particularly important.Therefore,this paper takes personal bankruptcy system as the research object,and uses the perspective of law and economics to understand the operation mechanism of personal bankruptcy system based on the existing literature research.The cost-benefit analysis of personal bankruptcy system reveals that the ultimate purpose of personal bankruptcy system is to resolve debt disputes,and the choice of personal bankruptcy system can reduce the transaction costs under the original conditions.Thus,the disputes and conflicts between creditors and debtors are eased and the overall social benefits increase,and the justice and benefits it implies are inherently consistent.As a result,the rights and obligations of legal subjects and the distribution of their responsibilities all affect the level of transaction costs.At the same time,we reflect on the current regulation of individuals’ reasonable withdrawal from the market economy in China:namely,the existing legal system and policy provisions are difficult to give honest and unfortunate debtors a fair and predictable debt settlement mechanism.Based on the above problems,this paper proposes ideas for the construction of China’s personal bankruptcy system in terms of procedures,entities and related supporting facilities.The free property system,the bankruptcy exemption system and the lapse of rights restoration system will be the focus of substantive regulations,while optional bankruptcy pre-procedures and summary procedures will be set up to reduce transaction costs.By improving the social credit system,especially the personal credit system,the implementation of the personal bankruptcy system is complementary to the implementation of the personal bankruptcy system,so as to enhance the complementarity between the systems and resolve the public’s resistance to the personal bankruptcy system.