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Personal Bankruptcy Law, Fresh Starts, and Judicial Practice

Author

Listed:
  • Régis Blazy
  • Bertrand Chopard

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Eric Langlais

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Ydriss Ziane

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

We explore the ways French judges respond to the possibility of discharging personal debts in exchange for liquidation of debtors' assets. We present empirical results on the determinants of judicial selection between debtors whose debts are wiped out and those who have to reimburse them. We find that French judges tend to disqualify debtors with multiple creditors from debt discharge, and are sensitive to regional labor market conditions. These empirical results help us understand better how French personal bankruptcy laws perform compared to other national systems. Finally, our results serve to fill the gap between bankruptcy rules and judicial practice.

Suggested Citation

  • Régis Blazy & Bertrand Chopard & Eric Langlais & Ydriss Ziane, 2011. "Personal Bankruptcy Law, Fresh Starts, and Judicial Practice," Working Papers hal-04140999, HAL.
    • Handle: RePEc:hal:wpaper:hal-04140999
    Note: View the original document on HAL open archive server: https://hal.science/hal-04140999
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    References listed on IDEAS

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    1. Ethan Cohen-Cole & Burcu Duygan-Bump & Judit Montoriol-Garriga, 2009. "Forgive and forget: who gets credit after bankruptcy and why?," Supervisory Research and Analysis Working Papers QAU09-2, Federal Reserve Bank of Boston.
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    3. Jeffrey J. Rachlinski & Chris Guthrie & Andrew J. Wistrich, 2007. "Heuristics and Biases in Bankruptcy Judges," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 167-186, March.
    4. Scott Fay & Erik Hurst & Michelle J. White, 2002. "The Household Bankruptcy Decision," American Economic Review, American Economic Association, vol. 92(3), pages 706-718, June.
    5. Larry H. Filer II & Jonathan D. Fisher, 2005. "The Consumption Effects Associated with Filing for Personal Bankruptcy," Southern Economic Journal, John Wiley & Sons, vol. 71(4), pages 837-854, April.
    6. Astrid A. Dick & Andreas Lehnert, 2010. "Personal Bankruptcy and Credit Market Competition," Journal of Finance, American Finance Association, vol. 65(2), pages 655-686, April.
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    8. Wang, Hung-Jen & White, Michelle J, 2000. "An Optimal Personal Bankruptcy Procedure and Proposed Reforms," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 255-286, January.
    9. Michelle J. White, 2007. "Bankruptcy Reform and Credit Cards," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 175-200, Fall.
    10. Filer, Larry & Fisher, Jonathan D., 2007. "Do liquidity constraints generate excess sensitivity in consumption? New evidence from a sample of post-bankruptcy households," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 790-805, December.
    11. Michelle J. White, 2007. "Bankruptcy Reform and Credit Cards," NBER Working Papers 13265, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Miguel García-Posada & Juan Mora-Sanguinetti, 2014. "Are there alternatives to bankruptcy? A study of small business distress in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(2), pages 287-332, August.
    2. Régis Blazy & Bertrand Chopard & Eric Langlais & Ydriss Ziane, 2012. "L’effacement des dettes des particuliers surendettés : Une étude empirique des décisions judiciaires," Working Papers hal-04141122, HAL.
    3. Nadja König, 2016. "Personal Insolvency Dynamics in Germany and the UK -- A SUR-TAR Approach," Macroeconomics and Finance Series 201602, University of Hamburg, Department of Socioeconomics.
    4. Fraisse, H. & Frouté, P., 2012. "Households Debt Restructuring: Evidence from the French Experience," Working papers 404, Banque de France.

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    More about this item

    Keywords

    Personal bankruptcy; over-indebtedness;

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • K29 - Law and Economics - - Regulation and Business Law - - - Other

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