Accessing Insolvent Consumer Debtors, Challenges and Strategies for Empirical Research

Insolvency law policy is best informed by a comprehensive understanding of the policy objectives of particular measures and the practical outcomes of particular choices. Yet there continues to be a lack of empirical research in Canada in respect of consumer insolvency, its underlying causes and its outcomes. Debtors' or bankrupts' experience with the insolvency system is almost impossible to gauge with the data now collected. Research funding for legal, economic and sociological scholars in the insolvency area continues to be very limited. This paper examines current challenges and strategies for empirical research on consumer insolvency in Canada. It explores options for researchers to access insolvent debtors that have utilized the procedures under the Bankruptcy and Insolvency Act (BIA), including how data could be more meaningfully collected and analyzed. This study was funded by the Canadian Office of the Superintendent of Bankruptcy (OSB) which has administrative oversight of the Bankruptcy and Insolvency Act. A working hypothesis of the project was that there is not yet adequate empirical research into consumer insolvency in Canada, such that our policy decision making is fully grounded in experience and informed decisions. The study offers an assessment of effective research methodology for accessing insolvent individuals, which may enhance future research in the area of consumer insolvency. It makes a number of recommendations for enhancing data collection, including that there should be funding available for broad based multidisciplinary longitudinal empirical research and for qualitative and quantitative research on targeted topics. Such research must respect the privacy and dignity of consumer debtors while allowing accurate collection and analysis of data. Part II briefly sets out the methodology for this report. Part III examines the scholarly literature, making a number of observations in respect of methodologies utilized in previous studies and how they can inform Canadian empirical study of consumer insolvency. Part IV analyses survey and interview responses from legal, medical, business and sociology scholars, and from insolvency professionals, in terms of their observations in respect of enhancing data collection. Part V examines current ethics considerations in research under the Canadian university system. Part VI concludes with several immediate recommendations for potential future research initiatives. It is hoped that this paper is the beginning of a dialogue in Canada in respect of creating a broad-based, accurate system of data collection and analysis, with a view to enhancing consumer insolvency law.