individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks …, education specific productivity shocks, and catastrophic consumption events, while bankruptcy is governed by the basic … Bankruptcy policy. …

individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks …, education specific productivity shocks, and catastrophic consumption events, while bankruptcy is governed by the basic … Bankruptcy policy. …

This research investigates how the legal sanctions prevailing under bankruptcy code impact on the design of debt … actively trades off between private renegotiation and costly bankruptcy procedure. Besides, the debtor’s investment policy … investment project (economic efficiency) and bankruptcy costs are avoided through private renegotiation (legal efficiency): this …

This research investigates how bankruptcy law influences the design of debt contracts and the investment choice through … sanctions are implemented in case of costly bankruptcy only. This way of resolving financial distress can be avoided yet, if a … private agreement is achieved. First, – when sanctions are high – we show that costly bankruptcy may be preferred by honest …

. The bankruptcy code is a "primitive creditor system" and financial distress leads to an arbitration between private … agreement and costly formal bankruptcy. We consider a standard debt contract between a bank and a small firm, both risk … show that costly formal bankruptcies may occur at equilibrium and the internalization of bankruptcy costs is impossible …

The aim of this paper is to provide new evidence on the value-creation process taking place in bankruptcy procedures … extent the debtor’s value can be preserved under bankruptcy by analyzing the recovery rates in France, Germany, and the … United Kingdom. We use a unique European sample of 900 corporate bankruptcy files that were manually collected in commercial …

This research investigates how bankruptcy law influences the design of debt contracts and the investment choice through … sanctions are implemented in case of costly bankruptcy only. This way of resolving financial distress can be avoided yet, if a … private agreement is achieved. First, – when sanctions are high – we show that costly bankruptcy may be preferred by honest …