Debtors’ prisons – is it time to bring them back?

In the mid-19th century, debtors’ prisons were a common way to deal with unpaid debt. Destitute persons who were unable to pay a court-ordered judgement would be incarcerated in these prisons till they had worked off their debt via labour or secured outside funds to pay the balance. And it’s time this punishment was returned… at least that’s what a team of debaters thought at this year’s national conference of the Australian Institute of Credit Management (AICM).

It was a clear debate topic: Australia’s insolvency regime is overly complex and produces minimal returns – should we consider reinstating debtors’ prison?

There was plenty of spirited, light-hearted banter during the debate, which was moderated by Jirsch Sutherland Partner Andrew Spring. The affirmative panel included Jirsch Sutherland Partner Amanda Young and Lawyer and Practice Director Natalie Ledlin from Ledlin Lawyers, while the negative side included Jirsch Sutherland Partner Malcolm Howell and Lily Nguyen from Landers & Rogers Lawyers.

“It was a light-hearted, yet topical debate discussing the effectiveness of Australia’s current insolvency regime compared with the common enforcement practice of debtors’ prisons in colonial times,” Amanda explains. “We considered the interplay of the various elements within this sector, being the individual, the business, the community, and the country on the global stage.”

Conference delegates were asked to vote, and the affirmative side won.

“It was a great opportunity to challenge each of our perspectives on how the insolvency industry operates,” says Amanda, who was part of the Jirsch Sutherland / Insolvency Intel team that attended and exhibited at the annual AICM conference.

“We don’t really advocate for the return of a debtors’ prison, but the topic certainly led to a lively debate!”

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