The information technology (IT) revolution coincided with the transformation of the U.S. unsecured credit market. From 1983 to 2004 households’ unsecured borrowing increased rapidly and there was a even faster increase in the number of bankruptcy filings. To study the effect of information...

This paper documents and interprets a fact central to the dynamics of informal consumer debt default: delinquency does not mean a persistent cessation of payment. In particular, we observe that for individuals 60 to 90 days late on payments, (i) 85% make payments during the next quarter to avoid...