From Bail Bonds to Foreclosures: The Financial Consequences of Pretrial Detention

61 Pages Posted: 28 Oct 2022 Last revised: 30 Nov 2023

See all articles by Pablo Slutzky

Pablo Slutzky

University of Maryland - Robert H. Smith School of Business

Sheng-Jun Xu

University of Alberta - School of Business

Date Written: October 24, 2022

Abstract

In the United States, the substantial population of criminal defendants detained awaiting trial faces high financial costs from the monetary bail system. Matching individual-level criminal case records to household-level financial data, we exploit the quasi-random assignment of court commissioners to study how pretrial detention affects household solvency. We find that pretrial detention results in higher rates of household insolvency, driven by higher foreclosure rates during periods of decreasing house prices and by higher rates of Chapter 7 bankruptcies. We highlight commercial bail bond usage as a critical factor driving insolvency and show that home equity can cushion households from insolvency.

Keywords: pretrial detention, bail bonds, bankruptcy, solvency, foreclosures

JEL Classification: D14, K41, K42

Suggested Citation

Slutzky, Pablo and Xu, Sheng-Jun, From Bail Bonds to Foreclosures: The Financial Consequences of Pretrial Detention (October 24, 2022). Available at SSRN: https://ssrn.com/abstract=4256830 or http://dx.doi.org/10.2139/ssrn.4256830

Pablo Slutzky (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Sheng-Jun Xu

University of Alberta - School of Business ( email )

2-32D Business Building
Edmonton, Alberta T6G 2R6
Canada

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