Insolvency relating to non-traders

Abstract

In Maltese law one immediately realises that there is a lack of an organised institute dealing with the non trader in financial difficulty and a vast difference, which I consider unfair and undesirable between treatment of this situation with regard the non-trader and that when a trader involved. Why is this situation still existent notwithstanding that other systems of law cater for the non-trader more efficiently? Are there not financial, moral and socioloqical reasons for creating an organised regime also for the non-trading debtor? Even in our law, our legislators have realised that protecting and catering for the non-trading debtor is essential and in fact that part of our law which deals with the recovery of debts contains specific sections which are meant to protect all debtors from over-eager creditors. Our legislators have seen fit to include such safe-guards even though the trader is well protected within the bankruptcy regime. Thus the one to benefit most from such sections of law is the non-trader. Once we agree that the situation needs controllinq, why not create an institute ad hoc. Examining Italian law which like our law distinguishes between the trader and non-trader as to the applicability of bankruptcy also caters for the non-trader better than our law and we find a very adequate form of cessio bonorum which is still very relevant up to today. English law proves to be by far the most organised. By providing bankruptcy both for the trader and the non trader, it has simplified matters. Besides it also follows the type of procedure utilised in the EEC Draft Bankruptcy Convention, a convention aiming at harmonising bankruptcy laws within Europe. In view of all this what would be the best solution for introduction in Maltese law would be the abolition of cessio bonorum as contemplated in our law and the introduction of specific sections dealing with a contractual form of cessio bonorum. Besides, I also propose the introduction of a new institute of insolvency which would be built on the English bankruptcy law as applicable to the non-trader with some procedural modifications taken from the existing Maltese law on bankruptcy, for the sake of uniformity.