Driven to Bankruptcy

46 Pages Posted: 19 Sep 2019 Last revised: 4 Dec 2020

See all articles by Pamela Foohey

Pamela Foohey

Yeshiva University - Benjamin N. Cardozo School of Law

Robert M. Lawless

University of Illinois College of Law

Deborah Thorne

University of Idaho

Date Written: September 10, 2019


Over the last ten years, 15.1 million people filed for bankruptcy owning 16.4 million cars. These cars provided access to work, education, medical care, childcare, food, and other life necessities. They also were major household investments, the most expensive asset most bankruptcy filers owned other than a house. Using original data from the Consumer Bankruptcy Project, we document what happens to car owners and their car loans when they enter bankruptcy. In brief, we find that people who file bankruptcy own automobiles at the same rate as the general population, and that they overwhelmingly indicate that they want to use bankruptcy as a tool to keep their automobiles. We further identify a subset of debtors, who constitute about a third of filers, who come to bankruptcy owning automobiles and little else. These cases are the most likely to be filed by people “driven to bankruptcy.” We detail what our results show about how people use consumer bankruptcy and where the system appears to falter. We conclude with recommendations on how to remedy these system issues, as well as what the future of the automobile marketplace, particularly subprime auto loans, likely means for people’s continued use of bankruptcy.

Keywords: consumer bankruptcy, chapter 7, chapter 13, automobiles, automobile lending, subprime auto lending, car loans, cars, auto debt, financial distress, license suspensions, parking tickets, auto repossession, debt collection

JEL Classification: D10, K35, K36

Suggested Citation

Foohey, Pamela and Lawless, Robert M. and Thorne, Deborah, Driven to Bankruptcy (September 10, 2019). 55 Wake Forest Law Review 287 (2020), University of Illinois College of Law Legal Studies Research Paper No. 20-01, Indiana Legal Studies Research Paper , Available at SSRN:

Pamela Foohey (Contact Author)

Yeshiva University - Benjamin N. Cardozo School of Law

55 Fifth Ave.
New York, NY 10003
United States

Robert M. Lawless

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States

Deborah Thorne

University of Idaho ( email )

Moscow, ID 83844
United States

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