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Insolvency after the 2005 Bankruptcy Reform

Author

Listed:
  • Jaromir Nosal

    (Boston College)

  • Stefania Albanesi

    (The Ohio State University)

Abstract

This paper provides a comprehensive analysis of the response to the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), the most important reform of personal bankruptcy in the United States in recent years. The 2005 legislation overhauled eligibility requirements and increased monetary costs of filing for bankruptcy. Using administrative credit report data from a national repre- sentative panel, we study the effects of the reform on bankruptcy filing, insolvency, and foreclosure.

Suggested Citation

  • Jaromir Nosal & Stefania Albanesi, 2016. "Insolvency after the 2005 Bankruptcy Reform," 2016 Meeting Papers 1147, Society for Economic Dynamics.
    • Handle: RePEc:red:sed016:1147
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    References listed on IDEAS

    as
    1. Will Dobbie & Jae Song, 2015. "Debt Relief and Debtor Outcomes: Measuring the Effects of Consumer Bankruptcy Protection," American Economic Review, American Economic Association, vol. 105(3), pages 1272-1311, March.
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    8. Tal Gross & Matthew J. Notowidigdo & Jialan Wang, 2014. "Liquidity Constraints and Consumer Bankruptcy: Evidence from Tax Rebates," The Review of Economics and Statistics, MIT Press, vol. 96(3), pages 431-443, July.
    9. Borys Grochulski, 2010. "Optimal Personal Bankruptcy Design under Moral Hazard," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 350-378, April.
    10. Donghoon Lee & Wilbert Van der Klaauw, 2010. "An introduction to the FRBNY Consumer Credit Panel," Staff Reports 479, Federal Reserve Bank of New York.
    11. Townsend, Robert M., 1979. "Optimal contracts and competitive markets with costly state verification," Journal of Economic Theory, Elsevier, vol. 21(2), pages 265-293, October.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Brian Jonghwan Lee, 2024. "Bankruptcy Lawyers and Credit Recovery," Working Papers 24-10, Federal Reserve Bank of Philadelphia.
    2. Wenli Li & Costas Meghir & Florian Oswald, 2022. "Consumer Bankruptcy, Mortgage Default and Labor Supply," Working Papers 22-26, Federal Reserve Bank of Philadelphia.
    3. Rajeev Darolia & Dubravka Ritter, 2020. "Strategic Default Among Private Student Loan Debtors: Evidence from Bankruptcy Reform," Education Finance and Policy, MIT Press, vol. 15(3), pages 487-517, Summer.
    4. António R. Antunes & Tiago Cavalcanti, 2019. "Tighter Credit and Consumer Bankruptcy Insurance," Working Papers w201921, Banco de Portugal, Economics and Research Department.
    5. Bleemer, Zachary & van der Klaauw, Wilbert, 2019. "Long-run net distributionary effects of federal disaster insurance: The case of Hurricane Katrina," Journal of Urban Economics, Elsevier, vol. 110(C), pages 70-88.
    6. Satyajit Chatterjee & Dean Corbae & Kyle Dempsey & José‐Víctor Ríos‐Rull, 2023. "A Quantitative Theory of the Credit Score," Econometrica, Econometric Society, vol. 91(5), pages 1803-1840, September.
    7. Tal Gross & Raymond Kluender & Feng Liu & Matthew J. Notowidigdo & Jialan Wang, 2021. "The Economic Consequences of Bankruptcy Reform," American Economic Review, American Economic Association, vol. 111(7), pages 2309-2341, July.
    8. Kyle Herkenhoff, 2016. "The Impact of Consumer Credit Access on Employment, Earnings and Entrepreneurship," 2016 Meeting Papers 781, Society for Economic Dynamics.
    9. Legal, Diego & Young, Eric R., 2024. "The effect of minimum wages on consumer bankruptcy," Journal of Economics and Business, Elsevier, vol. 129(C).
    10. Exler, Florian & Tertilt, Michèle, 2020. "Consumer Debt and Default: A Macro Perspective," IZA Discussion Papers 12966, Institute of Labor Economics (IZA).
    11. Giacomo De Giorgi & Costanza Naguib, 2022. "Life after Default: Credit Hardship and its Effects," Diskussionsschriften dp2206, Universitaet Bern, Departement Volkswirtschaft.
    12. Gordon Phillips & Kyle Herkenhoff, 2015. "The Impact of Consumer Credit Constraints on Earnings, Sorting, and Job Finding Rates of Displaced Workers," 2015 Meeting Papers 375, Society for Economic Dynamics.
    13. Stefania Albanesi & Jaromir Nosal, 2016. "Personal Bankruptcy in the US: Effects of the 2005 Reform," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(04), pages 08-14, February.
    14. repec:ptu:bdpart:e202202 is not listed on IDEAS
    15. Jason Allen & Kiana Basiri, 2016. "The Impact of Bankruptcy Reform on Insolvency Choice and Consumer Credit," Staff Working Papers 16-26, Bank of Canada.
    16. Victor Rios-Rull & Dean Corbae: & Satyajit Chatterjee, 2011. "A Theory of Credit Scoring and the Competitive Pricing of Default Risk," 2011 Meeting Papers 1115, Society for Economic Dynamics.
    17. Wenli Li & Costas Meghir & Florian Oswald, 2022. "Consumer Bankrupcty, Mortgage Default and Labor Supply," Working Papers hal-03882830, HAL.
    18. Manuel Coutinho Pereira & Lara Wemans, 2022. "Characteristics of parties and duration of insolvency cases in Portugal," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    19. De Giorgi, Giacomo & Naguib, Costanza, 2024. "Life after (soft) default," European Economic Review, Elsevier, vol. 167(C).
    20. Eleonora Brandimarti & Giacomo De Giorgi & Jeremy Laurent-Lucchetti, 2024. "Credit and Voting," Papers 2407.06808, arXiv.org.
    21. Müller, Karsten, 2022. "Busy bankruptcy courts and the cost of credit," Journal of Financial Economics, Elsevier, vol. 143(2), pages 824-845.
    22. Robert Dinterman & Ani L. Katchova, 2021. "Survival analysis of farm bankruptcy filings: Evaluating the time to completion of chapter 12 bankruptcy cases," Agribusiness, John Wiley & Sons, Ltd., vol. 37(2), pages 324-347, April.
    23. repec:ces:ifodic:v:13:y:2016:i:4:p:19191575 is not listed on IDEAS
    24. Stefania Albanesi & Jaromir Nosal, 2016. "Personal Bankruptcy in the US: Effects of the 2005 Reform," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(4), pages 08-14, 02.

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    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E49 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Other
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • K35 - Law and Economics - - Other Substantive Areas of Law - - - Personal Bankruptcy Law

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