There has long been demand for personal insolvency laws in China, yet such laws have hitherto been unavailable, in part due to ideological resistance. In more recent years there has been an increase in borrowing by individuals, which has led to increased calls for honest but unfortunate debtors to be able to obtain a fresh start. Yet there is significant public mistrust of defaulting debtors and in particular there is a shadow cast by those termed the Lao Lai that has led many to question the desirability of such a reform. There has also been a need for change in the development of an infrastructure to support a personal insolvency system, such as a social security, property registration and credit information systems, and although progress has been made in these regards there is still a need for further development. However, there has been case law progress in one province enabling collective resolutions of claims against insolvent debtors, and judicial guidance from senior courts has expanded on this. More recently, the COVID-19 pandemic has accelerated progress towards the enactment of personal insolvency laws on a local level in Shenzhen. This article considers the need for personal insolvency laws in China, identifies the obstacles that have hitherto stood in the way of such laws and discusses the momentum which has been recently gained towards the enactment of personal insolvency laws
