The Innovative German Approach to Consumer Debt Relief: Revolutionary Changes in German Law, and Surprising Lessons for the United States

This Article seeks to achieve two goals as it describes the consumer provisions of the new German Insolvency Act. First, it reveals critical distinctions between the theory of consumer insolvency, as described in German law and legal literature, and the reality of consumer insolvency in practice, as it has developed in the four-and-a-half years since the law went into effect. From both theoretical and practical perspectives, the German experience both supports and challenges many of the notions underlying consumer bankruptcy reform debates in the United States. As it turns out, the German and U.S. consumer debt relief systems produce largely the same economic results. At the same time, however, the German system includes important elements lacking in the United States, and it focuses on achieving important societal goals that U.S. law neglects. Second, this Article provides access to a wide variety of legislative material and legal commentary on the new German consumer insolvency law that has been neither translated nor discussed in Englis