Personal Bankruptcy Decisions Before and After Bankruptcy Reform

49 Pages Posted: 31 Mar 2012 Last revised: 14 Feb 2019

See all articles by Mark R. Lindblad

Mark R. Lindblad

Center for Responsible Lending

Melissa B. Jacoby

University of North Carolina School of Law

Roberto Quercia

University of North Carolina (UNC) at Chapel Hill - Department of City and Regional Planning

Sarah Riley

Date Written: , 2012

Abstract

We examine the personal bankruptcy decisions of lower-income homeowners before and after the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). 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, the 2005 Bankruptcy Reform explains a decrease in filings over time in counties that experienced lower filing rates.

Keywords: BAPCPA, bankruptcy reform, medical bankruptcy, medical bills, health insurance, mortgage delinquency

JEL Classification: I13, K35, Z18, J15, J64

Suggested Citation

Lindblad, Mark R. and Jacoby, Melissa B. and Quercia, Roberto G. and Riley, Sarah, Personal Bankruptcy Decisions Before and After Bankruptcy Reform (, 2012). Available at SSRN: https://ssrn.com/abstract=2031622 or http://dx.doi.org/10.2139/ssrn.2031622

Mark R. Lindblad (Contact Author)

Center for Responsible Lending ( email )

Durham, NC 27702
United States
919.794.6783 (Phone)

Melissa B. Jacoby

University of North Carolina School of Law ( email )

Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States

Roberto G. Quercia

University of North Carolina (UNC) at Chapel Hill - Department of City and Regional Planning ( email )

New East Building
Chapel Hill, NC 27599-3140
United States
919-962-4766 (Phone)
Not available (Fax)

No contact information is available for Sarah Riley

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