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Author: Lenger, Jordan
Resulting in 1 citation.
1. Lenger, Jordan
Three Essays on the Law and Economics of Bankruptcy
Ph.D. Dissertation, Department of Economics, University of Colorado at Boulder, 2020
Cohort(s): NLSY79
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): Bankruptcy; Debt/Borrowing

Permission to reprint the abstract has not been received from the publisher.

Households that discharge debt in Chapter 7 must wait eight years to refile. This policy creates an unusual combination of costs and benefits for households. Households temporarily lose their partial insurance against financial distress. Alternatively, post-bankruptcy households may receive improved credit offers as a result of increased expected repayments. In my first chapter, I analyze the dynamics of the waiting period by developing a quantitative theory of unsecured credit with default and endogenous credit scoring. To understand the mechanisms driving this result, I investigate the dynamic consequences of default under various waiting periods.

In my second chapter, I study a second feature of bankruptcy law: means-testing in "fresh-start" bankruptcy. One rationale for the policy was that households with the means to repay their debts could choose Chapter 13 'repayment plan' bankruptcy instead. Using data from bankruptcy filings and the NLSY, I show there is minimal substitution into Chapter 13. This suggests that there is a Chapter 13 puzzle which requires further investigation. In addition to demonstrating the existence of this puzzle, I offer evidence that households without real property are less likely to substitute into Chapter 13.

Bibliography Citation
Lenger, Jordan. Three Essays on the Law and Economics of Bankruptcy. Ph.D. Dissertation, Department of Economics, University of Colorado at Boulder, 2020.