Bankruptcy discharge: origins and liberalisation

The development of bankruptcy discharge reflects varying philosophies and
influences. Initially in English bankruptcy law discharge was absent, and even
when introduced in the early 18th century, it was restricted and difficult to attain
as the result of the creditors’ power of veto. Modern discharge policy is more
liberal, has a broader stakeholder focus, and an emphasis on shorter
bankruptcy periods calculated to combat risk averse behaviour and encourage
entrepreneurs to re-enter the market. Liberalising discharge is not a static idea
as its application in different jurisdictions, and over time, attest. This article
compares current discharge regimes in Australia, Malaysia and Singapore to
illustrate how discharge is responsive to political, economic, social, and even
cultural factors, and it is precisely this characteristic that makes it an essential
element of bankruptcy process in changing commercial environments.