Consumer Bankruptcy Research Papers - Academia.edu (original) (raw)

2025, The Journal of Finance

Qualitative choice models of consumers' decisions to file for bankruptcy and their choice of bankruptcy chapter are estimated jointly, combining choice‐based sampling techniques with a nested estimation procedure. Medical and credit card debt are found to be the strongest contributors to bankruptcy, with homeownership playing an important role with respect to both the decision to declare bankruptcy and the choice of bankruptcy alternative. The potential effects of legal changes relating to property exemptions and dischargeable debt categories are found to encourage debt repayment through Chapter 13.

2025

1. I motivi dell'attualità e della necessità di uno studio sull'automatic stay nel diritto fallimentare statunitense .

2024, Journal of Business and Technology Law

2024, Revista General de Insolvencias & reestructuraciones

RESUMEN:La reforma concursal operada por la Ley16/222, de 5 de septiembre de reforma del Texto Refundido de la Ley Concursal ha introducido cambios notables en el régimen jurídico de la exoneración del pasivo insatisfecho. La aplicación prác-tica de esta nueva regulación ha planteado numerosas dudas en aspectos de espe-cial relevancia. En el presente trabajo me centro en dos problemas importantes que están dando lugar a una jurisprudencia contradictoria: el control de la conducta del deudor y los problemas que plantea la ejecución de la hipoteca en los frecuentes casos de concursos sin masa.
The insolvency reform introduced by Law 16/222, of September 5,of reform of the Consolidated Text of the Insolvency Law has introduced notable changes in the legal regime of the exoneration of unsatisﬁed liabilities. The practical application of this new regulation has raised numerous doubts in aspects of particular relevance. In this paper I focus on two important problems that are giving rise to contradictory case law: the control of the debtor’s behavior and the problems posed by the foreclosure of the mortgage in the frequent cases of insolvency without assets

2024, Emory Bankruptcy Developments Journal

2024, American Economic Journal: Macroeconomics

Personal bankruptcies in the United States have increased dramatically, rising from 1.4 per thousand working age population in 1970 to 8.5 in 2002. We use a heterogeneous agent life-cycle model with competitive financial intermediaries who can observe households' earnings, age and current asset holdings to evaluate several commonly offered explanations. We find that increased uncertainty (income shocks, expense uncertainty) cannot quantitatively account for the rise in bankruptcies. Instead, the rise in filings appears to mainly reflect changes in the credit market environment. We find that credit market innovations which cause a decrease in the transactions cost of lending and a decline in the cost of bankruptcy can largely accounting for the rise in consumer bankruptcy. We also argue that the abolition of usury laws and other legal changes are unimportant.

2024, The American Economic Review

American consumer bankruptcy provides for a Fresh Start through the discharge of a household's debt. Until recently, many European countries specified a No Fresh Start policy of lifelong liability for debt. The trade-off between these two policies is that while Fresh Start provides insurance across states, it drives up interest rates and thereby makes life-cycle smoothing more difficult. This paper quantitatively compares these bankruptcy rules using a life-cycle model with incomplete markets calibrated to the U.S. and Germany. A key innovation is that households face idiosyncratic uncertainty about their net asset holdings (expense shocks) and labor income. We find that expense uncertainty plays a key role in evaluating consumer bankruptcy laws.

2024, Families in society-The journal of contemporary social services

This study expands our understanding of participation in the Earned Income Tax Credit (EITC) program among prime working-age individuals from EITC-eligible families between 1999 and 2005. It identifies gaps in program use over time such that outreach efforts might better target low-income working families to increase EITC take-up rates. Relying on National Longitudinal Survey data, findings indicate that more than one third (37.8%) of the population sample was EITC-eligible at least 1 year (3,034 of 8,033 individuals). Less than 20% of EITC-eligible families filed for the credit, and about half of these filed more than 1 year. Robust correlates of EITC use included lower income; larger families; separated, divorced, or widowed persons; and women versus their respective counterparts. Strategies to increase the EITC take-up rates are discussed.

2024

Institutional inversion occurs when collective attitudes lead to institutions that in turn lead to behaviors that are the opposite of those attitudes. We illustrate this process with the case of debt, in which antidebtor attitudes in Protestant (vs. Catholic) cultures led to institutions that fostered higher household indebtedness. We describe three factors hypothesized to make institutional inversion more likely: erroneous lay theories (particularly those that take a “demand-side” vs. a “supply-side” view of culture), moralization, and narrow construals (in terms of time, goals, and
populations considered).

2024

Psychologists often posit relatively straightforward attitude-behavior links. They also often study cultural arrangements as manifestations of attitudes and values writ large. However, we illustrate some difficulties with scaling up attitude-behavior principles from the individual-level to the cultural-level: Historical attitudes and values can lead to the creation of intermediating institutions, whose value-expressive functions may be at odds with the behavioral outcomes they produce. Through "institutional inversion," institutions may facilitate rather than inhibit stigmatized behavior. Here we examine attitudes and behavior related to debt, contrast historically Protestant versus Catholic places, and show how cultural attitudes against debt may lead to the creation of institutions that increase-rather than decrease-borrowing. Historical antidebt attitudes in Protestant places have led to contemporary households in Protestant cultures now carrying the highest debt loads. We discuss the importance of supply side factors, attitude ! institutions ! behavior causal chains, and some blind spots that lead to unintended consequences.

2024

Mapping debt services (190804) Contributors: The information on debt advisory services and debt settlement procedures in this report is largely based on input received from the Network of Eurofound Correspondents, further supported by Eurofound's own research and input from an expert meeting in Dublin (20 August 2019), and an expert workshop in Brussels (4 September 2019).

2024

Filing for bankruptcy protection temporarily stays IRS collection efforts and may provide leverage in negotiations. Other debts, e.g., unsecured debts, are dischargeable in bankruptcy. Taken together, these laws may lead to a discharge of unsecured debts which otherwise would be repaid but for the IRS debt. Using PACER data from the Eastern District of Washington, we investigate whether distributions of net income, assets and liabilities are significantly different among individuals filing for bankruptcy with IRS claims and those without. Using simple hypothesis tests, we find debtors with priority IRS claims are better off financially, except when controlling for other characteristics.

2024

Substantial changes were made to the consumer bankruptcy system with the enactment of BAPCPA. These changes, however, were enacted without data support for, or recognition of how such changes would affect the cost of accessing the bankruptcy system. The Costs of BAPCPA Pilot Study undertook a review of the costs of the consumer bankruptcy system following BAPCPA's enactment, to determine if costs were increased, and if so, whether these costs were passed on to the consumer. The issue of "costs" distills the question of what attorneys are charging consumers to represent them under the new regime. Thus a study of the costs of the consumer provisions of BAPCPA is in essence, the study of consumer bankruptcy attorney fees. The study also sought and discovered the answer to the question of whether unsecured creditor distributions were impacted by BAPCPA.

2024, SSRN Electronic Journal

This Report summarizes the central findings of the Consumer Bankruptcy Fee Study. It does not attempt to fully analyze all of the gathered data in order to reach conclusions and to make specific policy recommendations regarding the operation of the consumer bankruptcy system, and in particular, professional fees in consumer bankruptcy cases. While the Principal Investigator expects to draw specific conclusions and recommendations in separate articles based on the Study's findings, this Report is primarily descriptive. This Report does not provide a review of case law that has developed on the topic of attorney fees and professional compensation. The reader is directed to other sources for this information.

2024, Families in society-The journal of contemporary social services

Relying on data from the national longitudinal survey of youth, 1979 cohort, this article examines the pervasiveness and depth of credit card and mortgage debt in 2004 and 2008 (N = 3,966). Findings indicate that (a) significant majorities experienced either credit card debt, mortgage debt, or both; (b) debtors increased as a proportion of the population between 2004 and 2008; (c) mortgage-related debt, but not credit card debt, was disproportionately distributed along sociodemographic characteristics (married, more affluent, and more educated) and by attitudinal dispositions (locus of control and self-esteem); and (d) separated/widowed/divorced persons and never married persons were more economically vulnerable, having higher mortgage debt-to-income ratios of more than 1.5 to 2 times their income.

2024, JASSA

This paper examines recent trends in Australian personal bankruptcy by analysing a large data set obtained from the regulator, the Australian Financial Security Authority. It demonstrates a marked decline in Australian bankruptcy rates, since a peak in 2009, and a consistent rise in levels of unsecured debt among bankrupts. It identifies a number of distinct cohorts within the bankrupt population, and important differences between men and women, younger and older people, and professional and blue collar workers. We find that the debts of bankrupt individuals tend to fall into two distinct categories: a combination of taxation debts and legal liabilities; or a mixture of personal loan, overdraft and credit card debts, often linked to consumer spending. These findings represent a significant contribution to Australian empirical bankruptcy research. They are also timely, in light of the Commonwealth Government's recent proposals to implement significant changes to Australian bankruptcy law. 1

2024, Economic Papers

While the majority of those who declare bankruptcy do so voluntarily, a significant proportion are forced into bankruptcy as a result of legal action. This paper interrogates data obtained from the Australian Financial Security Authority to explore the attributes of debtors who go bankrupt involuntarily. Based on this analysis, the authors hypothesise that people who go bankrupt involuntarily are those who have more to lose by going bankrupt-such as a family home, a business venture or a managerial or professional occupation-meaning that they are more likely to resist bankruptcy until they are forced into it by their creditors.

2024, American Bankruptcy Institute Law Review

This study analyzes a unique data set to explore geographic variations in bankruptcy across Australia, drawing upon United States research that points to striking differences between urban and rural bankruptcies. The U.S. research finds that rural debtors enter bankruptcy in much more severe financial distress than their urban counterparts. The present study draws upon data obtained from the Australian Financial Security Authority, as well as data gathered by the Australian Bureau of Statistics. It finds that, compared with debtors in regional areas, debtors in major cities earn higher incomes, are more likely to be employed and more likely to cite the "excessive use of credit," rather than unemployment, as the cause of their financial problems. In most respects, however, it finds that differences between Australian bankruptcies in urban and non-urban locations are neither consistent nor pronounced. It concludes that broad generalizations about financial hardship in regional areas cannot do justice to the complex geography of bankruptcy in Australia. In this sense, the study poses a contrast to the U.S. research, which identifies stark differences between urban and rural debtors. It offers a nuanced account, one that links bankruptcy rates to localized factors such as housing prices and the impact of specific industries, such as mining.

2024, Journal of Finance

Qualitative choice models of consumers' decisions to file for bankruptcy and their choice of bankruptcy chapter are estimated jointly, combining choice-based sampling techniques with a nested estimation procedure. Medical and credit card debt are found to be the strongest contributors to bankruptcy, with homeownership playing an important role with respect to both the decision to declare bankruptcy and the choice of bankruptcy alternative. The potential effects of legal changes relating to property exemptions and dischargeable debt categories are found to encourage debt repayment through Chapter 13. ALMOST 5.5 MILLION HOUSEHOLDS F ILED for bankruptcy protection during the 1980s. The annual number of filings under Chapters 7 and 13 of the U.S. Bankruptcy Code doubled over that decade, compared with an increase of 28 percent in the previous ten years. Net losses to creditors are counted in the tens of billions of dollars, and these losses have grown twice as fast as consumer installment credit since 1980. Research in the area of consumer bankruptcy is largely based on the analysis of aggregate filing data~a set of references is contained in Domowitz and Eovaldi~1993!!. There are few general studies of bankruptcy that use data on individual debtors or households. 1 Given the importance of this area to banking, the credit industry, and public policy, it is surprising that there is no model quantifying the economic and demographic inf luences guiding the overall bankruptcy choice. An empirical qualitative choice model of the bankruptcy decision is presented here, using household-level data. The model includes both the decision to file for bankruptcy and the choice between available bankruptcy alternatives under the law. Distinctions between the relative impact of alternative sources of debt, household conditions, asset holdings, and property exemptions are important with respect to debates over extensions of credit and public policy relating to bankruptcy law. The probability of filing for bankruptcy protection is examined in * Domowitz is from Pennsylvania State University and Sartain is from Abt Associates. The first author thanks the Institute for Policy Research, Northwestern University, for financial support. We thank Joe Altonji, Tom Eovaldi, Dale Mortensen, Mark Watson, and two anonymous referees for helpful suggestions. 1 Virtually all of these studies focus on bankruptcy before the Bankruptcy Reform Act of 1978, a massive rewriting of bankruptcy statutes, and use narrow databases. An exception is Sullivan, Warren, and Westbrook~1989!. A review of studies based on disaggregated data is given in Luckett~1988!.

2024, Santangeli (a cura di), Il Codice della Crisi d'Impresa e dell'Insolvenza

Via Busto Arsizio, 40-20151 MILANO-www.giuffrefrancislefebvre.it La traduzione, l'adattamento totale o parziale, la riproduzione con qualsiasi mezzo (compresi i microfilm, le fotocopie), nonché la memorizzazione elettronica, sono riservati per tutti i paesi. ISBN 9788828809203 © Giuffré Francis Lefebvre-Copia riservata all'autore Sezione II RISTRUTTURAZIONE DEI DEBITI DEL CONSUMATORE Articolo 67 Procedura di ristrutturazione dei debiti Commento di ALESSANDRO FABBI La procedura di ristrutturazione, come accennato, riguarda il consumatore sovraindebitato che, con l'ausilio dell'OCC, può proporre un piano di ripianamento/rimodulazione dei propri debiti che indichi in modo specifico tempi e modalità per superare la crisi da sovraindebitamento, dinanzi al tribunale in composizione monocratica identificato-con regola di competenza funzionale ed inderogabile 1-come competente secondo le regole generali. L'art. 67 riferisce « ai creditori » la proposta in oggetto, ma trattasi di espressione ingiustificata, atteso che il loro consenso neppure in via maggioritaria è determinante ai fini dell'accettazione in giudizio della richiesta: per la ribadita natura di "concordato coattivo"-prescindente dal consenso dei creditori-della procedura in analisi (v. più ampiamente sub artt. 65 e 70) 2. La domanda (espressione più puntuale, per quanto appena segnalato)-come prevedeva già la l. n. 3/2012-ha contenuto libero, e può prevedere il soddisfacimento dei crediti, anche parziale ed in qualsiasi forma: cioè, oggi come ieri, continueremmo a ritenere anche al confronto con una giurisprudenza talvolta ondivaga sull'assetto previgente, con rateizzazioni, tramite datio in solutum, intervento di terzi quali garanti e/o con modificazioni dell'obbligazione dal lato soggettivo, ecc. Allo stesso modo, sebbene non riprodotta la relativa previsione rispetto alla esperienza della l. n. 3/2012, nulla osta a che la domanda integri anche « eventuali limitazioni all'accesso al mercato del credito al consumo, all'utilizzo degli strumenti di pagamento elettronico a credito e alla sottoscrizione di strumenti creditizi e finanziari » (già art. 8, comma 3).

2024, Santangeli (a cura di), Il Codice della Crisi d'Impresa e dell'Insolvenza

2024, SSRN Electronic Journal

Practically all industrialized economies restrict the length of time that credit bureaus can retain borrowers' negative credit information. There is, however, a large variation in the permitted retention times across countries. By exploiting a quasi-experimental variation in this retention time, we investigate what happens when negative information is deleted earlier from credit files. We find that the loss of information led banks to tighten their lending standards significantly as the expected retention time was diminished from on average three-and-a-half to three years exactly. Simultaneously, we find that borrowers who experience this shorter retention time default more frequently. Since borrowers nevertheless obtain more net access to credit and total defaults do not increase overall, we cannot rule out that this reduction in retention time is optimal.

2024, Social Science Research Network

Whether improving access to credit alleviates financial distress among households is the subject of intense debate. While it can mitigate financial hardship through the possibility of consumption smoothing, credit access may exacerbate distress among certain group of borrowers because of over-borrowing. Using the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), I investigate the impact of consumer credit availability on households' borrowing decisions and the subsequent effect on their financial well-being. Exploiting arguably exogenous cross-state variation in the generosity of bankruptcy law (exemption limits) prior to the Act, I find that households' access to credit increased significantly more in states with higher exemption limits, where lenders were more exposed to losses from bankruptcy filings. Households with low education and those with self-reported self-control problems responded aggressively by taking on large amounts of debt and spending it mainly on apparel and recreational activities. Consequently, households' distress, as measured by their inability to repay mortgage loans as well as a significant decline of food consumption, increased substantially more among low educated households and those with self-control problems. The paper highlights the real cost of credit availability for a subgroup of vulnerable borrowers.

2024

We examine the personal bankruptcy decisions of lower-income homeowners before and after the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. Econometric studies suggest that personal bankruptcy is explained by financial gain rather than adverse events, but data constraints have hindered tests of the adverse events hypothesis. Using household level panel data and controlling for the financial benefit of filing, we find that stressors related to cash flow, unexpected expenses, unemployment, health insurance coverage, medical bills, and mortgage delinquencies predict bankruptcy filings a year later. At the federal level, BAPCPA explains a decrease in filings over time in counties that experienced lower filing rates. Bankruptcy Determinants 2003-09 P a g e | 1 Personal Bankruptcy Decisions of Lower-Income Homeowners Personal bankruptcy filings increased five-fold from 1980 through October 2005, when the Bankruptcy Abuse Prevention and Consumer Protection Act (B...

2024

America's bankruptcy court system runs on delegation, all the way down. Delegation of work to bankruptcy courts - the highest-volume part of the federal court system - has been analyzed extensively, but bankruptcy judges' delegation to others has not. For a brief contribution to a volume of scholarship celebrating Professor William C. Whitford, I look at two ends of a delegation spectrum in chapter 13 cases, a subject on which Professor Whitford has long maintained a scholarly interest. Many, if not most, courts lie in between these poles, but the discussion identifies practices that can be difficult to detect from standard legal research methodologies, and presents new research questions in administrative law and federal courts as well as in bankruptcy law. In some districts, judges hand over their courtrooms to private trustees, who then appear to "preside" over most chapter 13 hearings scheduled on the docket that day. Because those trustees are Executive Branch...

2024

As part of an exchange on the financial crisis generated from a roundtable discussion at the University of North Carolina School of Law, this commentary observes the sharp shift in public discourse on, and regulatory interest in, the federal bankruptcy system, financially distressed homeowners, and judicial discretion, presumably brought about by the changed financial climate. That shift is reflected in stark differences between the 2005 amendments to the Bankruptcy Code (BAPCPA) and pending proposals to enable home mortgage modification in chapter 13 bankruptcy cases. I identify several challenges associated with using bankruptcy law to pursue current housing and economic policy goals and offer suggestions on how to manage those challenges, including the repeal of BAPCPA.

2024, De Jure

OPSOMMING 'n Vergelyking tussen formele skuldadministrasie en skuldhersieningdie voor-en nadele van hierdie maatreëls en voorstelle vir regshervorming 166 See, however, Changing Tides 17 (Pty) Ltd v Grobler (unreported case no 9226/2010)... more

2023

This thesis investigates the interrelationship between incomplete market arrangements, limited commitment in financial contracts and endogenous unsecured consumer bankruptcies in a heterogeneous agent general equilibrium framework. There are three chapters that complete this thesis. The following describes a brief abstract of the three chapters. Chapter 1: We construct a general equilibrium heterogeneous agent model where a continuum of ex-ante identical agents face uninsurable idiosyncratic shocks. Consumption insurance is restricted to a financial contract in the form of a one period non-contingent bond that is not enforceable. The existence of sequential incomplete markets along with incomplete contracts results in endogenous defaults in equilibrium. A novelty in our framework is the presence of partial defaults and the specification of the stochastic labor endowment shock. We discretize a normal mixture autoregressive process that can capture higher order moments of the earnings distribution. The calibrated model delivers a significant mass of households amounting to 18.9% who hold zero or negative wealth. Furthermore, about 28.7% of the households have a history of bad credit implying that they have limited access to the credit markets. Importantly, these statistics match their data counterparts almost perfectly. Finally, we highlight the fragile assumptions of asymmetric default costs prevalent in the sovereign default literature. Chapter 2: In the second chapter, we extend our model in two directions. Firstly, we incorporate a risk neutral financial intermediary that takes deposits and offers loans. In this way, we allow a price schedule that is contingent on the loan size, idiosyncratic earnings and employment state. Secondly, we model defaults that resemble the U.S. Chapter 13 bankruptcy law. In particular, defaulted agents face a temporary exclusion from the credit markets along with an earnings loss structured in the form of a wage garnishment. Our results highlight the role of financial intermediaries and risk-neutral pricing on the bankruptcy rates. We also deliver wealth and income distribution moments including the inequality indexes that match household survey data estimates. Chapter 3: In the third and final chapter, we capture the effects of a "credit crunch" and a "credit easing" shock on the real activity in our heterogeneous agent economic environment. Shocks take the form of a gradual tightening or loosening of the borrowing constraint. Periods of adjustment are set to mimic the Global Financial Crisis episode (2008-09) and the credit boom periods (2000-07). We confirm recent results in the post-crisis literature and find that tight credit generates a recession in the short run. However, we observe that in the long run a credit crunch increases productive capital in turn leading to an output growth. An interesting finding in this chapter is that prolonged periods of credit expansion drives an initial consumption driven output boom accompanied with excessive debt followed by increasing default rates leading to a destruction of productive capital and ending up in a sever recession.

2023, Financial Services Review

This study finds financial, demographic, and psychological differences between Chapter 13 filers and non-filers. Financial training reduces the likelihood of filing for personal bankruptcy. Males are twice as likely as females to be filers. Blacks are twice as likely as Whites to be filers. A single per- son is 38% less likely to file than a married person. Homeowners are five times as likely as renters to be filers. Increases in education, religious commitment, and parents’ income reduce the likelihood of filing. Increases in the psychological factors, self-efficacy, locus of control, and self-control, reduce the likelihood of filing for Chapter 13 bankruptcies. These results can be used to influence public policy to reduce personal bankruptcy.

2023, Social Science Research Network

Six years into the global economic and financial crisis, many European countries have suffered profound economic, political, and social repercussions. Governmental and constitutional crises, high levels of public debt, the adoption of austerity measures, unprecedented levels of unemployment, and the spreading of poverty have marked many European societies. While the EU is in a process of reexamining the whole design of the banking system with far-reaching political and institutional consequences, the impact of the economic crisis on indebted consumers, and specifically those with mortgages, has been much less discussed. The Working Paper presents the result of a research on the effects of the financial and EURO crisis in six European countries within and outside the Eurozone (Greece, Hungary, Iceland, Portugal, Romania, and Spain) having in common that they received international bailout loans under the condition of implementing intrusive austerity measures. In those countries consumers are still facing increasing levels of (over-)indebtedness and struggle with the effects of the crisis, both in financial and social terms. In this light, the studies pay attention to both the social reality and the legal change which is undergoing as triggered by legislative reforms and judicial decisions. The studies also lay open the shortcomings of a EU consumer policy which is largely based on the image of the reasonably circumspect consumer who is supposed to be autonomous, self-reliant, and reasonably well informed. In this regard, the EU suffers from a clear internal market bias that promotes and requires easy access to consumer and mortgage credit, without paying sufficient attention to the possible drawbacks in terms of social exclusion.

2023, Real Estate Economics

We construct a measure of possible income misstatement (PIM) for first-time homebuyers by quantifying the gap between growth in incomes reported on mortgage applications and growth in incomes reported on tax files from 2004 to 2014 in Canada. Using a two-stage least square framework to correct for the endogenous nature of house prices and PIM, we find robust evidence that part of the observed dispersion in PIM is caused by house price variation. This suggests borrowers have greater incentive to misstate income in high-priced markets. We report evidence that markets with a tendency for income misstatement also had higher default rates.

2023, SSRN Electronic Journal

The version in the Kent Academic Repository may differ from the final published version. Users are advised to check http://kar.kent.ac.uk for the status of the paper. Users should always cite the published version of record.

2023, South Carolina Law Review

2023, Social Science Research Network

Exemption laws enable people who default on loans to protect certain assets from liquidation. Every state has its own set of exemption laws, and they vary widely. The 1978 federal bankruptcy law contains a set of national exemptions, which debtors in bankruptcy are permitted to use instead of their state's exemptions unless the state has formally "opted out" of the federal system. We contend that states' decisions to opt out shed light on their exemption levels. We find that states are more likely to opt out if their state exemption is lower than the federal exemption and that states are more likely to opt out if they also have a high bankruptcy filing rate and transfer little money to the poor. These latter findings suggest that studies that examine the impact of exemptions on, for example, the bankruptcy rate should not treat exemption levels as exogenous variables. EvERY state has laws that protect some of the assets of debtors from the satisfaction of claims by creditors. These property exemption laws, which are also called bankruptcy exemptions, have long and important political histories. Texas entered the union as the first state with property exemptionsdesigned, it was said at the time, to draw settlers from other states-but the southern states responded quickly with exemptions of their own, and today every state has property exemptions, frequently quite generous. Like usury,

2023, Doradca Restrukturyzacyjny

The subject of the article is the problem of death of the bankrupt during the insolvency proceedings

2023, Doradca Restrukturyzacyjny

The subject of the article is to present the most interesting decisions of Polish bankruptcy courts

2023, Doradca Restrukturyzacyjny

The consumer insolvency proceedings in Poland

2023

Starting in the early 1990s credit scoring became widespread and central in credit granting decisions. Credit scores are scalar representations of default risk. They are used, in turn, to price credit, and as a result alter household borrowing and default decisions. We build on recent work on defaultable consumer credit under asymmetric information to develop a quantitative theory of credit scores. We construct and solve a rich and quantitatively-disciplined lifecycle model of consumption in which households have access to defaultable debt, and lenders are asymmetrically informed about household characteristics relevant to predicting default. We then allow lenders to keep record of inferences on the hidden type of a borrower, as well as a binary "flag" indicating a past default. These inferences arise endogenously from a signalling game induced by borrowers' need to obtain loans. We show how lenders' inferences evolve over the lifecycle as a function of household behavior in a way that can be naturally interpreted as "credit scores." In particular, we first show that lenders' assessments that a household has relatively low default risk matter significantly for the interest rates households pay. We then show that such assessments rise most sharply-and interest rates paid by borrowers fall most sharply (on the order of 5 − 6 percentage points)-when the bankruptcy flag is removed, consistent with work of Musto (2005). Lastly, we compare allocations across information regimes to provide a measure of the social value of credit scores, and the dependence of these measures on lenders' ability to observe borrower characteristics.

2023, Ekonomski Vjesnik Econviews Review of Contemporary Business Entrepreneurship and Economic Issues

Legal transplant, as a legal phenomenon, has always been present in legal history, and was especially brought to the fore in terms of creating major economic integrations, such as the European Union (EU). Membership of the Republic of Croatia in the EU has its strong legal basis because it belongs to the continental law school initially based on the reception of Roman law, and later German law. The Croatian academic community believes that the harmonization of bankruptcy and legal regulations with the EU laws is not a goal in itself, but has a strong economic rationale. In this context, a number of ambiguities in the current bankruptcy legislation are indicated, one of them being the absence of lex specialis regulations for consumer bankruptcy. As the legislator showed an initiative for the reception of a model of consumer bankruptcy (the

2023

Using individual level data collected in the Eastern District of Washington State, the type of employment is indentified as a significant factor in chapter choice. Additionally, a typical debtor's field of employment could either increase or decrease the likelihood of filing for bankruptcy protection under Chapter 7of the U.S. Bankruptcy Code relative to Chapter 13 of the Code. Given that counties have different distributions of employment by industry, that different industries pay different wages (at the mean) and that under the Bankruptcy Abuse Prevention Consumer Protection Act (BAPCPA) guidelines chapter choice is significantly driven by income, these findings imply that the BPCPA legislation is creating a distortion which makes filing a Chapter 7 bankruptcy (relative to a Chapter 13 filing) easier in certain counties than in others. Thus, BAPCPA has created local economic discrimination across counties within a particular bankruptcy court jurisdiction.

2023, Vol 6 No 2 (2021)

This study investigates the relationship between Gross Domestic Product (GDP), Consumer Price Index (CPI), Unemployment Rate (UE), Interest rate (IR), Household Debt (HD) on bankruptcy discharge and test the application of an Islamic concept of mutual cooperation, Social Relief Fund (SRF) to enhance the bankruptcy discharge. The study period is from 2000 to 2019. The autoregressive distributed lag (ARDL) was used in the study. Two models were tested; Model 1 consists of the macroeconomic variables without SRF and Model 2, with SRF. Model 1 shows none of the variables has significant effect on bankruptcy discharge for long run relationship. However, Model 2 shows GDP, CPI and SRF have significant positive long run relationship with bankruptcy discharge. This provides statistical evidence that SRF has a beneficial long-run relationship to enhance bankruptcy discharge in Malaysia. For short run relationship, Model 1 reveals GDP, CPI, and UE as significant variables to discharge. Model ...

2023

The author examines the communications and activities of bankruptcy lawyers participating in the listserv of the Bankruptcy Law Section of the State Bar of Texas and finds that those activities constitute a previously unrecognized form of “lawyering,” which he has defined as the work of lawyers in and through the legal system to accomplish the objectives of their clients. Review of specific postings about legal issues and practical problems by Texas bankruptcy lawyers, whose practices are primarily on behalf of individual debtors in cases under Chapters 7 and 13 of the Bankruptcy Code, and observations about the voluntary, collaborative, and uncompensated nature of those activities then undergird four main insights that in turn inform the author’s formulation of a specific definition of such activities, which he denominates “Listserv Lawyering.” Even though legal listservs have generally declined in popularity since their heyday in the 1990s, the author recommends other bar groups t...

2023, Emory Bankruptcy Developments Journal