Year: 1996
Type: report
Study design: Observational Study
Abstract: This paper examines how personal bankruptcy and bankruptcy exemptions affect the supply and demand for credit.While generous state-level bankruptcy exemptions are probably viewed by most policymakers as benefiting less-well-off borrowers, our results using data from the 1983 Survey of Consumer Finances suggest they increase the amount of credit held by high-asset households and reduce the availability and amount of credit to low-asset households, conditioning on observable characteristics.We also find evidence that interest rates on automobile loans for lowasset households are higher in high exemption states.Thus, bankruptcy exemptions redistribute credit toward borrowers with high assets.
DOI: 10.3386/w5653
Authors: Reint Gropp, John Karl Scholz, Michelle White
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
Funder: National Science Foundation
OpenAlex ID: W2891967657