Bankruptcy Lawyers and Credit Recovery

83 Pages Posted: 9 Apr 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: April, 2024


The author studies 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, the author empirically uncovers bankruptcy filings and credit recovery related to exogenous variations in bankruptcy law firm advertisements. The author first documents a significant advertising effect on filing rates and shows that advertising-induced filers are similar to existing filers. The author then finds a positive effect of advertisements on credit outcomes including credit score, new homeownership, and foreclosure. The author interprets 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 (April, 2024). FRB of Philadelphia Working Paper No. 24-10, 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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