Financial Education for Bankrupt Families: Attitudes and Needs

Abstract

This paper examines bankrupt families' attitudes toward, and need for, financial education. The data are derived from a longitudinal study of families who filed for personal bankruptcy. We examine the implications of bankrupt debtors' attitudes and experiences for the content and delivery of bankruptcy financial education, which in 2005 was made a prerequisite to consumer debtors' eligibility for discharge of their debts. We report the degree to which bankrupt families believed a financial education course would have helped them avoid bankruptcy and describe how these attitudes vary by demographic characteristics. We examine key financial difficulties that families face after bankruptcy and highlight ways in which bankruptcy financial education could be responsive to the realities of families' lives after they file bankruptcy.

Keywords: bankruptcy education, consumer bankruptcy, financial education, financial literacy

JEL Classification: D12, D14, K35, I28, P46