Personal Bankruptcy and Credit Supply and Demand
Author | : Reint Gropp |
Publisher | : |
Total Pages | : 48 |
Release | : 2008 |
ISBN-10 | : OCLC:1291164107 |
ISBN-13 | : |
Rating | : 4/5 ( Downloads) |
Download or read book Personal Bankruptcy and Credit Supply and Demand written by Reint Gropp and published by . This book was released on 2008 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.