An Anatomy of U.S. Personal Bankruptcy Under Chapter 13

32 Pages Posted: 28 Aug 2017

See all articles by Hülya Eraslan

Hülya Eraslan

Rice University

Gizem Koşar

Federal Reserve Banks - Federal Reserve Bank of New York

Wenli Li

Federal Reserve Bank of Philadelphia

Pierre-Daniel G. Sarte

Federal Reserve Bank of Richmond

Date Written: August 2017

Abstract

We build a structural model that captures salient features of personal bankruptcy under Chapter 13. We estimate our model using a novel data set that we construct from bankruptcies filed in Delaware between 2001 and 2002. Our estimation results highlight the importance of a debtor's choice of repayment plan length on other Chapter 13 outcomes. We use the estimated model to conduct policy experiments to evaluate the impact of more stringent laws that impose 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.

Suggested Citation

Eraslan, Hülya and Koşar, Gizem and Li, Wenli and Sarte, Pierre-Daniel, An Anatomy of U.S. Personal Bankruptcy Under Chapter 13 (August 2017). International Economic Review, Vol. 58, Issue 3, pp. 671-702, 2017, Available at SSRN: https://ssrn.com/abstract=3026810 or http://dx.doi.org/10.1111/iere.12231

Gizem Koşar

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Wenli Li

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Pierre-Daniel Sarte

Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
161
PlumX Metrics