| Description |
In response to rising consumer bankruptcy filing rates, federal bankruptcy reform under the Bankruptcy Abuse Prevention and Consumer Prevention Act of 2005 (BAPCPA) reduced households' demand for bankruptcy through a variety of measures that made it less generous. To evaluate impacts of reform beyond plummeting filing rates, this study introduces a unique dataset of Utah bankruptcy filers from 2003-2007 that reveals changing consumer characteristics and outcomes during the bankruptcy process. Compared to the state's general population, households in the bankruptcy sample have lower incomes, higher poverty rates, more unmarried individuals, and lower home ownership rates. More of the debtors filing since BAPCPA attempted partial repayment under Chapter 13 rather than seeking a Chapter 7 discharge. Cases under both chapters took longer to complete and were more likely to be dismissed. Households entering bankruptcy postreform were more likely to have a recent debt collection proceeding before filing and a subsequent bankruptcy after filing. The percentage of medical debt rose and share of credit card debt fell for cases filed under BAPCPA compared to before. Among Chapter 7 filers, we observe higher income and more households with nonexempt assets. Chapter 13 cases postreform exhibit a lower share of secured debt and the absence of a significant increase in the percentage of debt repaid. iv Relative to those filing for the first time in 8 years, repeat bankruptcy filers were more likely to have children, mortgages, and medical debt. BAPCPA appears to have reduced repeat filings. Self-employed, repeat bankruptcy filers in large households with an income-earning spouse tended to choose Chapter 13 over Chapter 7. More income and student loans are also associated with preferring Chapter 13. Married filers with higher levels of debt, particularly medical and secured debt, are more likely to file jointly than individually, as are filers with government assistance as an income source. Joint filings were less common after BAPCPA reform than before. |
