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Credit Supply to Bankrupt Households

Author

Listed:
  • Geng Li

    (Federal Reserve Board)

  • Benjamin J. Keys

    (Federal Reserve Board)

  • Song Han

    (Federal Reserve Board)

Abstract

Our analysis so far has shown some interesting results. In particular, we find that the supply of unsecured credit to the households who filed for bankruptcy more than two years before is lower than that to the households with similar credit scores but no bankruptcy records on their credit reports. However, households who filed for bankruptcy fewer than two years before received more credit card solicitations than comparable nonfilers with no bankruptcy records. But we also find that the interest rates offered to bankrupt households are in general almost a full percentage point higher than to nonfilers with similar credit scores. These results suggest that lenders may have exploited the legal restrictions on re-filing of personal bankruptcy and have deemed the recent filers as “safer” borrowers.

Suggested Citation

  • Geng Li & Benjamin J. Keys & Song Han, 2010. "Credit Supply to Bankrupt Households," 2010 Meeting Papers 1292, Society for Economic Dynamics.
    • Handle: RePEc:red:sed010:1292
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    Cited by:

    1. Brennan, Linda & Zevallos, Zuleyka & Binney, Wayne, 2011. "Vulnerable consumers and debt: Can social marketing assist?," Australasian marketing journal, Elsevier, vol. 19(3), pages 203-211.
    2. Victor Stango & Jonathan Zinman, 2013. "Borrowing High vs. Borrowing Higher: Sources and Consequences of Dispersion in Individual Borrowing Costs," NBER Working Papers 19069, National Bureau of Economic Research, Inc.
    3. Karandish, Fatemeh & Šimůnek, Jiří, 2017. "Two-dimensional modeling of nitrogen and water dynamics for various N-managed water-saving irrigation strategies using HYDRUS," Agricultural Water Management, Elsevier, vol. 193(C), pages 174-190.

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