Did BAPCPA Deter the Wealthy? The 2005 Bankruptcy Reform’s Effect on Filings Across the Income and Asset Distribution

40 Pages Posted: 12 Nov 2010

See all articles by Frank McIntyre

Frank McIntyre

Amazon.com

Daniel M Sullivan

JPMorgan Chase Institute

Timothy J. Layton

Harvard Medical School - Department of Health Care Policy; National Bureau of Economic Research

Date Written: January 23, 2010

Abstract

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) to deter those with means from evading their debts in a Chapter 7 bankruptcy. The law substantially increased the cost to debtors of filing bankruptcy. We use national data gathered at the zip code level to estimate how the law affected debtor filing rates at different income levels and by homeownership. We consider econometric models that account both for observed and unobserved differences across neighborhoods, as well as allow for arbitrary differences in bankruptcy time trends across neighborhoods. Results suggest that the law disproportionately reduced filings among poor neighborhoods by about 32% and that poorer filers also shifted 12% more towards pricier Chapter 13 filings with these effects being exacerbated by differences in homeownership.

Suggested Citation

McIntyre, Frank and Sullivan, Daniel M and Layton, Timothy J., Did BAPCPA Deter the Wealthy? The 2005 Bankruptcy Reform’s Effect on Filings Across the Income and Asset Distribution (January 23, 2010). Available at SSRN: https://ssrn.com/abstract=1708119 or http://dx.doi.org/10.2139/ssrn.1708119

Frank McIntyre (Contact Author)

Amazon.com ( email )

Seattle, WA 98144
United States

Daniel M Sullivan

JPMorgan Chase Institute ( email )

601 Pennsylvania Avenue NW
Washington, DC 20004
United States

Timothy J. Layton

Harvard Medical School - Department of Health Care Policy ( email )

180 Longwood Ave
Boston, MA 02115
United States

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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