Determinants of the Consumer Bankruptcy Decision

59 Pages Posted: 19 May 1997

See all articles by Ian Domowitz

Ian Domowitz

ITG, Inc.; National Bureau of Economic Research (NBER)

Robert Sartain

First USA Bank

Date Written: January 1997


A financial portrait of households declaring bankruptcy under both Chapters 7 and 13 of the Bankruptcy Code is developed, and compared to the general population. Qualitative choice models of the decision to file for bankruptcy and chapter selection are estimated jointly, combining choice-based sampling techniques with a nested estimation procedure. Medical and credit card debt are found to be the strongest contributors to bankruptcy, with homeownership playing an important role with respect to both and the choice of bankruptcy alternative. The potential effects of legal changes relating to property exemptions and dischargeable debt categories are found to encourage debt repayment through Chapter 13.

JEL Classification: G33, G12, G21

Suggested Citation

Domowitz, Ian H. and Sartain, Robert, Determinants of the Consumer Bankruptcy Decision (January 1997). Available at SSRN: or

Ian H. Domowitz (Contact Author)

ITG, Inc. ( email )

380 Madison Avenue, 4th Floor
Electronic Market Initiatives
New York, NY 10017
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert Sartain

First USA Bank ( email )

201 N. Walnut Street
Partnership Marketing Analytics Mailstop DE1-1195
Wilmington, DE 19801
United States
(302) 282-3824 (Phone)

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

Paper statistics

Abstract Views
PlumX Metrics