@techreport{Morgan2009Seismic,
abstract = {We argue that the 2005 bankruptcy abuse reform (BAR) contributed to the surge in subprime foreclosures that followed its passage. Before BAR, over-indebted mortgagors could free up income to pay the mortgage by filing bankruptcy and having their unsecured debts discharged. BAR blocks that maneuver for better-off filers by way of a means test. We identify the effects of BAR using state home equity bankruptcy exemptions; filers in low-exemption states were not very protected before BAR, so they would be less affected by the reform. Difference-in-difference regressions confirm four predictions implied by that identification strategy. Our findings add to research trying to explain the surge in subprime foreclosures and to a broader literature on household bankruptcy demand and credit supply.},
address = {New York, NY},
author = {Donald P. Morgan and Benjamin Iverson and Matthew Botsch},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {G21; G33; K35; 330; Bankruptcy; subprime foreclosures; subprime mortgages; unsecured debt; credit card debt; home equity exemptions; cram-down},
language = {eng},
number = {358},
publisher = {Federal Reserve Bank of New York},
title = {Seismic effects of the bankruptcy reform},
type = {Staff Report, Federal Reserve Bank of New York},
url = {http://hdl.handle.net/10419/60960},
year = {2009}
}
