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Insolvency After the 2005 Bankruptcy Reform

Albanesi, Stefania; Nosal, Jaromir - C.E.P.R. Discussion Papers - 2015

, especially, the financial cost of filing for bankruptcy. We study the effects of the reform on bankruptcy, insolvency, and …. We find that the decline in bankruptcy filings resulted in a rise in the rate and persistence of insolvency as well as an … that insolvency is associated with worse financial outcomes than bankruptcy, as insolvent individuals have less access to …

Persistent link: https://www.econbiz.de/10011252618

Leverage and Asset Bubbles: Averting Armageddon with Chapter 11?

Miller, Marcus; Stiglitz, Joseph E - C.E.P.R. Discussion Papers - 2009

driving asset prices to ‘overshoot’ equilibrium when an asset bubble bursts - threatening widespread insolvency and what …

Persistent link: https://www.econbiz.de/10008528524

The Housing Crisis and Bankruptcy Reform: The Prepackaged Chapter 13 Approach

Posner, Eric A; Zingales, Luigi - C.E.P.R. Discussion Papers - 2009

The housing crisis threatens to destroy hundreds of billions of dollars of value by causing homeowners with negative equity to walk away from their houses. A house in foreclosure is worth 30 to 50 percent less than a house that a homeowner either retains or sells on the market, and a foreclosed...

Persistent link: https://www.econbiz.de/10005666502

Costly Contracts and Consumer Credit

Livshits, Igor; MacGee, James; Tertilt, Michèle - C.E.P.R. Discussion Papers - 2011

Financial innovations are a common explanation of the rise in consumer credit and bankruptcies. To evaluate this story, we develop a simple model that incorporates two key frictions: asymmetric information about borrowers’ risk of default and a fixed cost to create each contract offered by...

Persistent link: https://www.econbiz.de/10009322977

Who Invests in Home Equity to Exempt Wealth from Bankruptcy?

Corradin, Stefano; Gropp, Reint; Huizinga, Harry; … - C.E.P.R. Discussion Papers - 2010

Homestead exemptions to personal bankruptcy allow households to retain their home equity up to a limit determined at the state level. Households that may experience bankruptcy thus have an incentive to bias their portfolios towards home equity. Using US household data from the Survey of Income...

Persistent link: https://www.econbiz.de/10008692314

Firm Default and Aggregate Fluctuations

Jacobson, Tor; Kindell, Rikard; Lindé, Jesper; … - C.E.P.R. Discussion Papers - 2008

This paper studies the relation between macroeconomic fluctuations and corporate defaults while conditioning on industry affiliation and an extensive set of firm-specific factors. Using a multiperiod logit approach on a panel data set for all incorporated Swedish businesses over 1990-2002, we...

Persistent link: https://www.econbiz.de/10005504257

Multiple Versus Single Banking Relationships

Detragiache, Enrica; Garella, Paolo; Guiso, Luigi - C.E.P.R. Discussion Papers - 1997

This paper develops a theoretical model in which firms may choose multiple banking relationships to reduce the risk that financing will be denied by ‘relationship banks’ should the latter experience liquidity problems and refuse to roll over lines of credit. The inability to refinance from...

Persistent link: https://www.econbiz.de/10005504283

Liquidity Constraints, Production Costs And Output Decisions

Povel, Paul E M; Raith, Michael - C.E.P.R. Discussion Papers - 2000

This paper analyses the interaction of financing and output market decisions in an oligopolistic setting. We integrate two ideas that have been analysed separately in previous work: some authors argue that due to risk-shifting, debt (leverage) makes a firm 'aggressive' in its output market;...

Persistent link: https://www.econbiz.de/10005504397

Multiple Lenders and Corporate Distress: Evidence on Debt Restructuring

Brunner, Antje; Krahnen, Jan Pieter - C.E.P.R. Discussion Papers - 2004

In the recent theoretical literature on lending risk, the common pool problem in multi-bank relationships has been analysed extensively. In this Paper we address this topic empirically, relying on a unique panel dataset that includes detailed credit-fie information on distressed lending...

Persistent link: https://www.econbiz.de/10005504452

Cross-Country Variations in Capital Structures: The Role of Bankruptcy Codes

Acharya, Viral V; John, Kose; Sundaram, Rangarajan K - C.E.P.R. Discussion Papers - 2005

We conduct a theoretical and empirical investigation of the impact of bankruptcy codes on firms’ capital-structure choices. In our theoretical framework, costs of financial distress are endogenously determined as a function of the bankruptcy code. Anticipated liquidation values emerge as the...

Persistent link: https://www.econbiz.de/10005504655