Section 1129(b)(1) of the Bankruptcy Code codifies a principle known as the 'absolute priority rule.' The absolute priority rule requires that creditors be provided for in full before holders of equity can receive or retain any property under a plan of reorganization. The absolute priority rule...

This paper assesses the importance of adverse health shocks as triggers of bankruptcy filings. We view car crashes as a proxy for health shocks and draw on a large sample of police crash reports linked to hospital admission records and bankruptcy case files. We report two findings: (i) there is...

We specify and estimate a lifecycle model of consumption, housing demand and labor supply in an environment where 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...

In Poland, over the past four years we have been witnessing the liberalisation of the laws on consumer bankruptcy which results in an increased number of declared bankruptcies and there are many indications that both phenomena will proceed. This paper deals with some major manifestations of such...

In the U.S., individuals who file for bankruptcy can protect a certain amount of property from creditor liquidation during the debt settlement process. Our analysis exploits changes in these laws to determine the impact on home mortgage lending. We find that the additional debtor protection...

In the U.S., individual parties who file for bankruptcy can exempt a certain dollar amount of property from creditor liquidation during the debt settlement process. We examine the effect of changes to these protection laws on bank lending to small businesses. Our results indicate that additional...

African American bankruptcy filers are more likely to select Chapter 13 than other debtors, who opt instead for Chapter 7, which has higher success rates and lower attorney fees. Prior scholarship blames racial discrimination by bankruptcy attorneys. We present an alternative explanation:...

Entry barriers into social insurance programs will be effective screening devices if they cause only those individuals receiving higher benefits from a program to participate in that program. We find evidence for this by using plausibly exogenous variations in travel-related entry costs into the...

Does the ability to protect an asset from unsecured creditors affect its price? This paper identifies the impact of bankruptcy protection on house prices using 139 changes in homestead exemptions. Large increases in the homestead exemption raised house prices 3% before 2005. Smaller exemption...

Random case assignment is thought to be an important feature of decision-making in federal courts because it helps guard against favoritism (actual or perceived) toward particular parties or types of cases. In bankruptcy courts, cases are randomly assigned to both judges and trustees. In Chapter...