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Bankruptcy Reform and Homeownership Risk

24 Pages Posted: 20 Jul 2006 Last revised: 15 May 2008

Melissa B. Jacoby

University of North Carolina School of Law


The personal bankruptcy system is part of a larger system of household risk management. Much of the discussion of personal bankruptcy has focused on bankruptcy's insurance role with respect to unsecured obligations like credit cards and medical bills. In this symposium contribution, I redirect the analysis by evaluating the bankruptcy system, and particularly chapter 13, as a mortgagor protection law. In particular, I explore how bankruptcy might be encouraging and prolonging unsustainable homeownership. I then consider the impact of two recent revisions to the Bankruptcy Code relating to credit counseling and repeat filers. I conclude that these revisions may improve the system modestly by enabling sorting based on homeownership sustainability.

Keywords: bankruptcy, homeownership, foreclosure, social insurance

JEL Classification: K19

Suggested Citation

Jacoby, Melissa B., Bankruptcy Reform and Homeownership Risk. University of Illinois Law Review, 2007; UNC Legal Studies Research Paper No. 918006. Available at SSRN:

Melissa B. Jacoby (Contact Author)

University of North Carolina School of Law ( email )

Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States

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