Research project
Pathways out of poverty
How can the interests of people living in poverty be better protected when current insolvency laws are neglecting their needs?
- Duration
- 2026 - 2029
- Contact
- Jessie Pool
- Funding
-
LUF
Problematic household debt is a persistent social challenge. People can become over-indebted as a result of life events such as unemployment, illness or divorce, as well as through intergenerational poverty. Once problematic debts arise, many people struggle to escape them independently. Effective debt relief is therefore essential to prevent people from remaining trapped in debt and to support a genuine second chance.
Insolvency law has an important role to play in providing this second chance. It can provide a binding discharge of debts that people cannot realistically repay. Yet many people with problematic debts never enter insolvency proceedings, and those who do may enter only after significant delay or struggle to complete the proceedings successfully.
Pathways out of poverty examines why insolvency law does not always live up to its potential as an instrument for poverty reduction. The project focuses not only on what the law formally requires, but also on how insolvency proceedings work in practice: how rules are designed, communicated and applied, and how they are experienced by people with problematic debts.
A different perspective on insolvency law
Existing insolvency proceedings often rely on assumptions about people's ability to make decisions, exercise self-control and manage complex administrative requirements. However, research from behavioural psychology, economics and public administration shows that financial stress, scarcity, stigma and institutional complexity can significantly affect people's decision-making and practical ability to comply with rules.
The project brings these insights together with legal analysis and empirical research. It asks whether the design of current insolvency proceedings reflects the realities faced by people with problematic debts, and which aspects of the legal process create barriers to access, compliance and successful completion.
Research approach
The project uses a mixed-methods approach combining doctrinal and comparative legal analysis with qualitative empirical and interdisciplinary research.
The research consists of four interconnected work packages:
1. Mapping the legal framework
The project analyses the European and Dutch legal framework for household insolvency and examines how the idea of a “second chance” is defined and implemented. It identifies the objectives and behavioural assumptions underlying current insolvency proceedings.
2. Bringing together interdisciplinary insights
Research from behavioural psychology, economics and public administration is systematically reviewed and synthesised. This provides insight into decision-making under financial stress, the causes and consequences of problematic debt, and the institutional context in which insolvency proceedings are implemented.
3. Understanding lived experiences
The project examines how people with problematic debts experience insolvency proceedings. Interviews with people who have considered, entered or completed insolvency proceedings, as well as debt counsellors, are combined with case studies of insolvency proceedings. This research identifies which rules and procedural requirements most strongly affect access, compliance and successful completion.
4. Designing better insolvency proceedings
The final stage translates the legal, interdisciplinary and empirical findings into concrete options for legal reform. Through co-design with people with lived experience, practitioners and policymakers, the project develops and tests proposals that aim to make insolvency proceedings more legally feasible and practically usable.
Impact
The project aims to strengthen insolvency law as an effective social policy instrument for poverty reduction. Its findings can provide practical guidance for courts, debt counsellors and policymakers on how insolvency proceedings can be designed and communicated to better reflect the practical abilities of people with problematic debts.
In the longer term, more effective debt relief can help reduce the risk that people remain trapped in debt because legal procedures exceed their practical capacities. The project also contributes to the scientific development of insolvency law and socio-legal research by connecting legal rules with behavioural, economic and social realities.
By placing the experiences of people with problematic debts at the centre of the analysis, Pathways Out of Poverty seeks to contribute to insolvency proceedings that offer a meaningful and realistic pathway towards a second chance.