Personal Bankruptcy and Credit Supply and Demand / Reint Gropp, John Karl Scholz, Michelle White.

Format:

Book

Author/Creator:

Gropp, Reint.

Contributor:

National Bureau of Economic Research.

Scholz, John Karl.

White, Michelle.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5653.

NBER working paper series no. w5653

Language:

English

Subjects (All):

Bankruptcy.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Cambridge, Mass : National Bureau of Economic Research, 1996.

Summary:

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 benefitting 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 low-asset households are higher in high exemption states. Thus, bankruptcy exemptions redistribute credit toward borrowers with high assets.

Notes:

Print version record

July 1996.