Bankruptcy Lawyers and Credit Recovery

83 Pages Posted: 8 Dec 2023 Last revised: 27 Jan 2024

See all articles by Brian Jonghwan Lee

Brian Jonghwan Lee

Columbia University - Columbia Business School; Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Multiple version iconThere are 2 versions of this paper

Date Written: November 30, 2023


I study how bankruptcy law firm advertisements affect credit recovery of households in financial distress. Exploiting the border discontinuity strategy associated with the geographic unit in which local TV advertisements are sold, I empirically uncover bankruptcy filings and credit recovery related to exogenous variations in bankruptcy law firm advertisements. I first document a significant advertising effect on filing rates and show that advertising-induced filers are similar to existing filers. I then find a positive effect of advertisements on credit outcomes including credit score, new homeownership, and foreclosure. I interpret these findings as evidence that lawyers address information frictions in households’ assessment of the bankruptcy option.

Keywords: Personal bankruptcy, lawyers, intermediaries, advertising

JEL Classification: G51, K35, M37

Suggested Citation

Lee, Brian Jonghwan, Bankruptcy Lawyers and Credit Recovery (November 30, 2023). Available at SSRN: or

Brian Jonghwan Lee (Contact Author)

Columbia University - Columbia Business School ( email )

665 West 130th Street
New York, NY 10027
United States

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

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