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Personal Bankruptcy Law, Fresh Starts, and Judicial Practice

Author

Listed:
  • Régis Blazy
  • Bertrand Chopard
  • Eric Langlais
  • Ydriss Ziane

Abstract

We explore the rationale behind and the mechanisms employed by French judges while discharging personal debts in exchange for liquidation of debtors' assets. Our empirical results highlight 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 variables representative of economic activity in the courts' locality. These empirical results help us to understand better how much French personal bankruptcy law is rather pro-creditor than pro-debtor.

Suggested Citation

  • Régis Blazy & Bertrand Chopard & Eric Langlais & Ydriss Ziane, 2013. "Personal Bankruptcy Law, Fresh Starts, and Judicial Practice," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 169(4), pages 680-702, December.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201312)169:4__
    DOI: 10.1628/093245613X13806312325814
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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?," Risk and Policy Analysis Unit Working Paper QAU09-2, Federal Reserve Bank of Boston.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. Larry H. Filer II & Jonathan D. Fisher, 2005. "The Consumption Effects Associated with Filing for Personal Bankruptcy," Southern Economic Journal, Southern Economic Association, vol. 71(4), pages 837-854, April.
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    Citations

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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. Fraisse, H. & Frouté, P., 2012. "Households Debt Restructuring: Evidence from the French Experience," Working papers 404, Banque de France.
    3. Régis Blazy & Bertrand Chopard & Éric Langlais & Ydriss Ziane, 2013. "L'effacement des dettes des particuliers surendettés : une étude empirique des décisions judiciaires," Economie & Prévision, La Documentation Française, vol. 0(1), pages 81-99.
    4. 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.

    More about this item

    JEL classification:

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

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