Advanced Search
MyIDEAS: Login to save this paper or follow this series

Personal Liabilities and Bankruptcy Reform: An International Perspective

Contents:

Author Info

  • Michelle Alexopoulos
  • Ian Domowitz

Abstract

Recent changes in bankruptcy law pertaining to personal liabilities are widespread. Broad trends include eligibility of personal liabilities in voluntary bankruptcy proceedings, strict insolvency requirements, and debt discharge. Moral considerations are even codified within the law, restricting discharge possibilities. There is movement towards repayment of debt out of income, as opposed to simple liquidation of assets. Associated with this trend are pre-court negotiations and vagaries in the judicial process, with respect to enforcement of objective criteria concerning the amount of debt discharged in bankruptcy. We document these changes across Europe and North America, and investigate their theoretical implications with respect to policy initiatives and intent. The focus is on interest rates, employment, and the probability of bankruptcy. Employment rises as bankruptcy law becomes more stringent. Employment effects are complex, however, leading to the possibility that domestic and international interest rates may rise as the law becomes stricter. It is not always clear that a tightening of bankruptcy possibilities decreases the incidence of bankruptcy, except in the stark case of no debt discharge. Flexibility in the judicial process with respect to application of objective standards for debt repayment is generally detrimental, suggesting strict bankruptcy rules as opposed to court or pre-court discretion. Firm ownership structures matter with respect to effects stemming from bankruptcy law changes. Proposed international agreements, such as the European Union Insolvency Convention, may lower international interest rates, but do not necessarily imply a decrease in the incidence of bankruptcy.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Paper provided by Institute for Policy Resarch at Northwestern University in its series IPR working papers with number 98-8.

as in new window
Length:
Date of creation:
Date of revision:
Handle: RePEc:wop:nwuipr:98-8

Contact details of provider:
Postal: 2040 Sheridan Road, Evanston, IL 60208-4100
Phone: 847-491-8712
Email:
Web page: http://www.nwu.edu/IPR/publications/wpindex1.html
More information through EDIRC

Related research

Keywords:

Other versions of this item:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Lee, Seung-Hyun & Yamakawa, Yasuhiro & Peng, Mike W. & Barney, Jay B., 2011. "How do bankruptcy laws affect entrepreneurship development around the world?," Journal of Business Venturing, Elsevier, vol. 26(5), pages 505-520, September.
  2. Bertazzi, Ilaria, 2014. "A challenge to normativity and economic theory, the case ofdebtors movements," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201405, University of Turin.
  3. Mette Ejrnæs & Stefan Hochguertel, 2008. "Entrepreneurial Moral Hazard in Income Insurance: Empirical Evidence from a Large Administrative Sample," CAM Working Papers 2008-02, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  4. Igor Livshits & James MacGee & Mich�le Tertilt, 2007. "Consumer Bankruptcy: A Fresh Start," American Economic Review, American Economic Association, vol. 97(1), pages 402-418, March.
  5. Michelle J. White, 2005. "Economic Analysis of Corporate and Personal Bankruptcy Law," NBER Working Papers 11536, National Bureau of Economic Research, Inc.
  6. Ronel Elul & Narayanan Subramanian, 2002. "Forum-Shopping and Personal Bankruptcy," Journal of Financial Services Research, Springer, vol. 21(3), pages 233-255, June.
  7. Andreas Lehnert & Dean M. Maki, 2002. "Consumption, debt and portfolio choice: testing the effect of bankruptcy law," Finance and Economics Discussion Series 2002-14, Board of Governors of the Federal Reserve System (U.S.).
  8. Mette Ejrnaes & Stefan Hochguertel, 2008. "Entrepreneurial Moral Hazard in Income Insurance," Tinbergen Institute Discussion Papers 08-065/3, Tinbergen Institute, revised 12 Aug 2011.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wop:nwuipr:98-8. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.