What are the positive and normative implications of eliminating bankruptcy protection for indebted individuals? Without … bankruptcy protection, creditors can collect on defaulted debt to the extent permitted by wage garnishment laws. The elimination …

This paper argues that the U.S. bankruptcy reform of 2005 played an important role in the mortgage crisis and the … current recession. When debtors file for bankruptcy, credit card debt and other types of debt are discharged - thus loosening … debtors' budget constraints. Homeowners in financial distress can therefore use bankruptcy to avoid losing their homes, since …

Because of the recent surge in U.S. personal defaults, Congress is currently debating bankruptcy reform legislation … previous work, bankruptcy options and production are explicitly taken into account. The authors' findings indicate that means … testing would not improve upon current bankruptcy provisions and, at best, leaves aggregate filings, output, and welfare …

By compiling a novel data set from bankruptcy court dockets recorded in Delaware between 2001 and 2002, the authors … build and estimate a structural model of Chapter 13 bankruptcy. This allows them to quantify how key debtor characteristics …, including whether they are experiencing bankruptcy for the first time, their past-due secured debt at the time of filing, and …