This chapter critiques the contractual and marketized model of English personal insolvency law and questions the general appropriateness of ‘market-based debt resolution’ in the context of contemporary household over-indebtedness. A market failure analysis highlights how key assumptions of the efficient market hypothesis do not hold under these conditions. While Chapter 3 illustrated the contracting failures that arise in ex ante credit markets, such failures are even more likely to arise in the ex post bankruptcy market. Principal-agency problems, information asymmetries and behavioural biases lead to sub-optimal outcomes. Consequently, a bankruptcy system based on debtor choice between procedures, and dominated by consensual renegotiation, is likely to produce a ‘market friendly’ approach only where the ‘market’ is understood as industries of creditors and intermediaries. Contrary to the ideal of mutually beneficial exchange, it is increasingly visible that the outcomes produced by such an approach are detrimental to debtors. They produce repayment plans enduring for long periods and involving high repayments, allowing creditors and intermediaries to maximise their returns while generating extensive costs for debtors and social costs. Given the increasingly recognised public interest case for household debt relief, these outcomes raise pressing public policy concerns.