Household Borrowing after Personal Bankruptcy
121 citations recorded by the source corpus.
A large literature has examined factors leading to filing for personal bankruptcy, but little is known about household borrowing after bankruptcy. Using data from the Survey of Consumer Finances, we find that relative to comparable nonfilers, bankruptcy filers generally have more limited access to unsecured credit but borrow more secured debt post bankruptcy, and they pay higher interest rates on all types of debt. We also find that credit access and borrowing costs improve as more time passed since filing. However, filers experience renewed debt payment difficulties and accumulate less wealth, even many years after filing, suggesting that for many bankrupt households, debt discharges fail to generate an effective fresh start as intended by the law. Our estimate also provides empirical guidance for calibrating the equilibrium models of household credit.
Subfields: Accounting, Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/6d668c8c1bed5466afee69bc035e2df1dbc2d71b
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Accounting
In Economics and Econometrics
In Finance
Citations in the corpus
- Handbook of Consumer Finance Research (2008, background): “The 1980s saw the “democratization of credit” when almost anyone could get a credit card (Black & Morgan, 1999 , p. 1), a market development that has persisted (Han & Li, 2011 ).”