An Anatomy of U.S. Personal Bankruptcy Under Chapter 13
40 Pages Posted: 1 Nov 2014
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An Anatomy of U.S. Personal Bankruptcy Under Chapter 13
Date Written: October 20, 2014
Abstract
We build a structural model of Chapter 13 bankruptcy that captures salient features of personal bankruptcy under Chapter 13. We estimate our model using a novel data set we construct from bankruptcy court dockets recorded in Delaware between 2001 and 2002. Our estimation results highlight the importance of debtor’s choice of repayment plan length on Chapter 13 outcomes under the restrictions imposed by the bankruptcy law. We use the estimated model to conduct policy experiments to evaluate the impact of more stringent provisions of Chapter 13 that impose additional restrictions on the length of repayment plans. We find that these provisions would not materially affect creditor recovery rates and would not necessarily make discharge more likely for debtors with income above the state median income.
Keywords: Bankruptcy, Repayment
Suggested Citation: Suggested Citation
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