DOCSLIB.ORG

Corporate and Personal Bankruptcy Law

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Corporate and Personal Bankruptcy Law LS07CH08-White ARI 1 October 2011 17:47 Corporate and Personal Bankruptcy Law Michelle J. White1,2 1Department of Economics, University of California, San Diego, La Jolla, California 92093; email: [email protected] 2Cheung Kong Graduate School of Business, and Research Associate, National Bureau of Economic Research, Cambridge, Massachusetts 02138 Annu. Rev. Law Soc. Sci. 2011. 7:139–64 Keywords The Annual Review of Law and Social Science is reorganization, liquidation, priority, absolute priority rule, default, online at lawsocsci.annualreviews.org exemptions, filtering failure, workouts, fresh start, foreclosure This article’s doi: 10.1146/annurev-lawsocsci-102510-105401 Abstract Copyright c 2011 by Annual Reviews. Bankruptcy is the legal process by which the debts of firms, individ- All rights reserved uals, and occasionally governments in financial distress are resolved. 1550-3585/11/1201-0139$20.00 by University of California - San Diego on 09/05/12. For personal use only. Bankruptcy law always includes three components. First, it provides a collective framework for simultaneously resolving all debts of the Annu. Rev. Law. Soc. Sci. 2011.7:139-164. Downloaded from www.annualreviews.org bankrupt entity, regardless of when they are due. Second, it provides rules for determining how the assets and earnings used to repay are divided among creditors. Third, bankruptcy law specifies punishments intended to discourage debtors from defaulting on their debts and fil- ing for bankruptcy. This review discusses and evaluates bankruptcy law by examining whether and when the law encourages debtors and cred- itors to behave in economically efficient ways. It also considers how bankruptcy law might be changed to improve economic efficiency. The review shows that there are multiple economic objectives of bankruptcy law because the law has very diverse effects. Some of these objectives differ for individuals versus corporations in bankruptcy. 139 LS07CH08-White ARI 1 October 2011 17:47 INTRODUCTION of time after filing.1 Another part of the pun- Bankruptcy is the legal process by which the ishment for bankruptcy is whether and when debts of firms, individuals, and occasionally filers’ liability to repay debts is discharged. In governments in financial distress are resolved. the United States, most bankruptcy filers re- Debtors file for bankruptcy because they can- ceive a quick discharge from debt, but in France not pay debts as they come due and/or because and Germany, discharges are issued only af- their liabilities exceed their assets. ter debtors use part of their earnings for 5 to Bankruptcy law always includes three com- 10 years to repay debts, and bankruptcy judges ponents. First, it provides a collective frame- can deny the discharge if they feel that debtors work for simultaneously resolving all debts of did not try hard enough to repay debts. In other the bankrupt entity, regardless of when the countries, debt discharge occurs only when the debts come due. Bankrupts may be required to debtor dies. For corporations in bankruptcy, use some or all of their assets to repay their debt is discharged quickly, but the corporation debts: Bankruptcy law includes rules determin- itself ceases to exist. ing which assets must be used to repay debts Bankruptcy procedures may involve ei- versus which assets bankrupts are allowed to ther liquidation or reorganization of the keep (if any). Bankrupts may also be required bankrupt entity. When corporations liquidate to use some of their future earnings to re- in bankruptcy, all of their assets are sold and pay debts, and bankruptcy law provides simi- the proceeds are used to repay creditors. Assets lar rules determining how much of their future may be sold piecemeal or as a going concern earnings must be used to repay debts. These if the corporation is still operating when it rules differ depending on whether bankrupts files for bankruptcy. The size of the pie in are corporations, individuals, or governments. bankruptcy liquidation is all of the corpora- Second, bankruptcy law provides rules for de- tion’s assets. When corporations reorganize termining how the assets and earnings used to in bankruptcy, they keep some or all of their repay debts are divided among creditors. This assets, continue to operate, and follow a plan to part of bankruptcy law also includes rules that use part of their future earnings to repay debt. limit creditors’ rights to grab assets and keep In this situation, the pie includes only part of those assets out of the collective debt resolu- the corporation’s assets, but it also includes tion procedure. Thus bankruptcy law deter- part of the corporation’s future earnings. For mines both the size of the pie in bankruptcy, individuals, bankruptcy never involves com- i.e., the total amount paid to creditors, and plete liquidation. Individual bankrupts may be the division of the pie among individual required to give up some of their assets; these creditors. by University of California - San Diego on 09/05/12. For personal use only. Third, bankruptcy law specifies how debtors 1There are other punishments for debtors who default but Annu. Rev. Law. Soc. Sci. 2011.7:139-164. Downloaded from www.annualreviews.org are punished for filing for bankruptcy. In do not file for bankruptcy, including credit collectors call- the United States, the main punishments for ing them, suing them, and garnishing their wages (see below bankruptcy are making filers’ names public and for further discussion). Past punishments for default were allowing the bankruptcy filing to remain on far more severe and included the death penalty, exile, selling debtors into slavery, and putting them in debtors’ prisons. their credit records for 10 years. These pun- Early bankruptcy laws also specified severe punishments for ishments stigmatize bankruptcy filers and harm filing, including debtor’s prison and the death penalty for them financially because they face greater diffi- filers who concealed assets. Debts were discharged only if creditors consented. See Efrat (2006) for multicountry infor- culty postbankruptcy in obtaining loans, rent- mation on punishments for default and bankruptcy. Sandage ing apartments, and sometimes obtaining jobs. (2005), Balleisen (2001), and Mann (2002) discuss attitudes In the United Kingdom, punishments include toward debt and default in the United States and the adoption of U.S. bankruptcy laws—there were several—in the nine- barring bankruptcy filers from managing firms teenth century. Skeel (2001) gives a history of U.S. personal or holding certain public offices for a period and corporate bankruptcy law during the twentieth century. 140 White LS07CH08-White ARI 1 October 2011 17:47 are liquidated and the proceeds are used to on personal and small business bankruptcy.2 repay creditors. But individuals’ most valuable Corporate bankruptcy refers to the bankruptcy asset is usually their human capital—their of large- and medium-sized firms, which I as- education and training—and the only way to sume are organized as corporations. Personal liquidate human capital is to sell individuals bankruptcy refers to the bankruptcies of both into slavery. Because slavery is no longer individual debtors and small businesses. Small allowed, bankrupt individuals always keep their business bankruptcy is treated as part of per- human capital and the right to decide whether sonal bankruptcy because small businesses are and how to use it. Thus bankrupt individuals owned by individuals or partners who are legally always keep some of their assets. However, like responsible for their business debts. When corporations that reorganize, bankrupt individ- businesses fail, owners often file for personal uals may be obliged to use some of the future bankruptcy in order to have their business debts earnings that their human capital produces to discharged. Even when small businesses are in- repay creditors, usually for a fixed number of corporated, owners often guarantee the debts years. This means that bankruptcy procedures of their businesses, so personal bankruptcy law for individuals are always reorganizations, and applies. the size of the pie used to repay creditors is less than the value of bankrupt individuals’ I. CORPORATE BANKRUPTCY assets. This review discusses and evaluates Bankruptcy law affects the economic efficiency bankruptcy law by examining whether and of corporate behavior, both when corporations when the law encourages debtors and creditors are in financial distress and when they are fi- to behave in economically efficient ways. It nancially healthy. also considers how bankruptcy law might be changed to improve economic efficiency. The Effects of Priority Rules in Bankruptcy discussion abstracts from the details of U.S. and on Corporate Behavior other countries’ bankruptcy laws in order to Priority rules are rules for dividing repayment focus on common features of bankruptcy law, in bankruptcy among creditors and sharehold- and it also attempts to avoid use of legal terms. ers of a corporation. An important priority rule This review shows that bankruptcy law has a is the absolute priority rule (APR), which re- variety of economic objectives, some of which quires that unsecured creditors be repaid in full differ for individuals versus corporations. The before shareholders receive anything. When variety of economic objectives results from the there are multiple creditors, priority among fact that bankruptcy law has widespread effects: them is determined by whether creditors have by University of California - San Diego on 09/05/12. For personal use only. causing responses that change the supply and a secured interest in a particular asset owned demand for many types of credit; which finan- Annu. Rev. Law. Soc. Sci. 2011.7:139-164. Downloaded from www.annualreviews.org by the corporation or by whether creditors cially distressed firms shut down versus which have made agreements with the corporation continue to operate; corporate managers’ in- that specify a priority ordering. Suppose a centives to work hard, invest, and take risks; and corporation has creditors A and B and A’s individual debtors’ incentives to work hard, be- loan was made before B’s.
Load more

Recommended publications
  • 201-497 UST Annual Report.Indd
    U.S. Department of Justice U.S. Trustee Program United States Trustee Program Annual Report of Significant accomplishments Fiscal Year 2003 United States Trustee Program Annual Report of Significant accomplishments Fiscal Year 2003 i Table of Contents Strategic Objective; Mission Statement . 0v Message from the Attorney General . 0vi Message from the Associate Attorney General . 0vii Message from the Director . 0viii Executive Summary . 0iix Chapter 1. U.S. Trustee Program . 1 Chapter 2. Organization and Administration Organization . 3 Executive Office for U.S. Trustees . 3 Regional and Field Offices . 3 Budget and Appropriations . 4 Chapter 3. National Civil Enforcement Initiative Civil Enforcement Actions . 8 Denial or Revocation of Discharge . 8 Concealment and Failure to Disclose . 8 Credit Card Bust-Outs . 10 Serial Filers . 11 Dismissal for ‘Substantial Abuse’ . 11 Improper Conduct by Attorneys . 13 Violations by Bankruptcy Petition Preparers . 14 Serial Filings and Identity Fraud . 16 Chapter 4. Criminal Enforcement Criminal Enforcement Actions . 21 Concealment of Assets . 21 Crimes by Attorneys and Bankruptcy Petition Preparers . 23 Credit Card ‘Bust-Outs’ and Identity Fraud . 24 Other Crimes . 26 Multi-Agency Working Groups . 27 Chapter 5. Litigation in Chapter 11 Business Reorganizations U.S. Trustee’s Duties in Chapter 11 Cases . 29 Appointment of Trustee or Examiner . 30 Employment and Compensation of Professionals . 32 Preventing Delay and Preserving Assets . 34 ii Chapter 6. Trustee Oversight Chapter 7 Trustees . 37 Appointment . 37 Oversight Duties . 37 Chapter 12 and Chapter 13 Trustees . 38 Appointment . 38 Oversight Duties . 38 Computer Security . 39 Trustee Training . 39 Chapter 7. Training and Outreach National Bankruptcy Training Institute . 43 Public Outreach .
    [Show full text]
  • Personal Bankruptcy and Credit Market Competition
    Federal Reserve Bank of New York Staff Reports Personal Bankruptcy and Credit Market Competition Astrid Dick Andreas Lehnert Staff Report no. 272 January 2007 This paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. The views expressed in the paper are those of the authors and are not necessarily reflective of views at the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors. Personal Bankruptcy and Credit Market Competition Astrid Dick and Andreas Lehnert Federal Reserve Bank of New York Staff Reports, no. 272 January 2007 JEL classification: K3, G2, L1 Abstract The effect of credit market competition on borrower default is theoretically ambiguous, because the quantity of credit supplied may rise or fall following an increase in competition. We investigate empirically the relationship between credit market competition, lending to households, and personal bankruptcy rates in the United States. We exploit the exogenous variation in market contestability brought on by banking deregulation at the state level: after deregulation, banks faced the threat of entry into their state markets. We find that deregulation increased competition for borrowers, prompting banks to adopt more sophisticated credit rating technology. In turn, these developments led previously excluded households to enter the credit market. We document that, following deregulation, (1) overall lending increased, (2) loss rates on loans decreased, and (3) bankruptcy rates rose. Further, we find that lending and bankruptcy rates increased more in states with greater actual (rather than potential) entry, and that credit card productivity increased after the removal of entry restrictions.
    [Show full text]
  • Regional Outlook
    Regional Outlook FEDERAL DEPOSIT INSURANCE CORPORATION THIRD QUARTER 1998 In Focus This Quarter FDIC ◆ The Asian Economic Crisis: Implications for the U.S. Economy—The Memphis economic crisis in Asia is now more than one year old, yet its consequences are still Region reverberating throughout the global economy. There are growing indications that some sectors of the U.S. economy are beginning to experience slower growth direct­ ly attributable to problems in Asia. Consequently, lenders should be cognizant of their customers’ exposure to global markets. Lending and strategic decisions pred­ icated on an assumption of continued robust economic growth should be carefully scrutinized. See page 3. By Paul C. Bishop ◆ CLOs Lure Another Major Bank Asset off the Balance Sheet— Securitization of corporate loans and bonds is in full swing, with 1997 issuance exceeding that of securities backed by credit card loans. Collateralized loan obliga­ tions (CLOs) and collateralized bond obligations, securities with deal- and issuer- specific risks, are potential bank investments that may grow in popularity if a current proposal to lower the risk weights for AAA-rated securities is enacted. Banks with an ample supply of low-margin commercial loans are expected to issue more CLOs to an increasingly demanding secondary commercial loan market. An institution’s CLO strategy may have implications that should be considered when evaluating its capital adequacy trends. See page 8. By Kathy Kalser and Allen Puwalski ◆ The Payment System: Emerging Issues—The payment system is the Division of heart of the U.S. economic infrastructure, moving value at the rate of 90 times the Insurance U.S.
    [Show full text]
  • Personal Bankruptcy and the Accumulation of Shadow Debt∗
    Personal Bankruptcy and the Accumulation of Shadow Debt∗ Bronson Argyle† Benjamin Iverson‡ Taylor Nadauld§ Christopher Palmer¶ May 2021 Abstract Compiling new liability-level data from the balance sheets of personal bankruptcy fil- ers, we document that a sizable share of reported liabilities are “shadow debt,” debt not reported to credit bureaus that often arises from the non-payment of goods and services. We use this new data to evaluate how debtor cash flows affect when consumers file for bankruptcy and how much debt they have at bankruptcy. We find that filers respond to a quasi-exogenous $100 increase in monthly cash flows by delaying filing by an average of one month and by increasing unsecured indebtedness by $4,000 in the months preceding filing. A large share of the additional debt incurred by delaying filers is shadow debt, and our effects are concentrated among filers without employment, health, or marriage shocks. Keywords: personal bankruptcy, unsecured debt, shadow debt ∗We thank conference and seminar participants at the AEA, AFA, Boston Federal Reserve, BYU, CFPB, Dart- mouth, the FDIC Consumer Symposium, MIT, Michigan State University, PUC Chile, the University of Rochester, and WEAI; our discussants Pat Akey, Arpit Gupta, Ryan Lewis, Feng Liu, Neale Mahoney, and Michelle White; and Carter Davis, Anthony DeFusco, Paul Goldsmith-Pinkham, Kyle Herkenhoff, Sasha Indarte, Ben Keys, Raymond Kluender, Sam Kruger, Brigitte Madrian, Gregor Matvos, Carlos Parra, Antoinette Schoar, Amit Seru, Felipe Sev- erino, Adrien Verdelhan, and Jialan Wang for helpful comments. We appreciate the research assistance of Tammy Lee, Joseph Leung, and Richard Maxwell. We benefited tremendously from helpful conversations with David Sime, Clerk of the Utah Bankruptcy Court, and thank the Utah, Minnesota, Florida North and Florida South Bankruptcy Courts for data access.
    [Show full text]
  • Consumer Bankruptcy and Financial Health∗
    Consumer Bankruptcy and Financial Health∗ Will Dobbie Paul Goldsmith-Pinkham Princeton University and NBER Harvard University Crystal Yang Harvard Law School January 2015 Abstract This paper estimates the effect of Chapter 13 bankruptcy protection on post-filing financial outcomes using a new dataset linking bankruptcy filings to credit bureau records. Our empirical strategy uses the leniency of randomly-assigned judges as an instrument for Chapter 13 protec- tion. Over the first five post-filing years, we find that Chapter 13 protection decreases an index measuring adverse financial events such as civil judgments and repossessions by 0.316 standard deviations, increases the probability of being a homeowner by 13.2 percentage points, and in- creases credit scores by 14.9 points. Chapter 13 protection has little impact on open unsecured debt, but decreases the amount of debt in collections by $1,315. We find evidence that both debt forgiveness and protection from debt collectors are important drivers of our results. ∗We thank Tal Gross, Matthew Notowidigdo, and Jialan Wang for providing the bankruptcy data used in this analysis. We also thank Lanier Benkard, Raj Chetty, Roland Fryer, Edward Glaeser, Guido Imbens, Lawrence Katz, and numerous seminar participants for helpful comments and suggestions. Jessica Wagner provided outstanding research assistance. Correspondence can be addressed to the authors by e-mail: [email protected] [Dobbie], [email protected] [Goldsmith-Pinkham], or [email protected] [Yang]. All remaining errors are our own. America is a nation of debtors. The amount of debt held by the average American consumer increased from $31,840 to $45,500 between 2003 and 2013, with more than 14 percent of consumers having at least one debt in collections by 2013 (Federal Reserve Bank of New York 2014).
    [Show full text]
  • Bankruptcy and Credit Card Debt: Is There a Causal Relationship?
    98-277 E CRS Report for Congress Received through the CRS Web Bankruptcy and Credit Card Debt: Is There A Causal Relationship? March 19, 1998 (name redacted) Economic Analyst Economics Division Congressional Research Service ˜ The Library of Congress Abstract This report explores the relationship between credit card debt and the fast- growing rate of personal bankruptcy. Is the bankruptcy code so biased towards debtors that it encourages irresponsible and/or fraudulent credit card borrowing, or have lenders themselves been reckless in issuing credit cards to households with limited financial resources and sophistication? Legislation before the Congress (H.R. 2500, H.R. 2650, and S. 1301) proposes reforms in bankruptcy law that would benefit credit card lenders by requiring certain debtors to repay their debts out of future income. (For an analysis of these proposals, see CRS Report 98-69A.) This report, which will be updated only if significant new research is published or if new data become available, consists primarily of economic analysis and does not presuppose an extensive knowledge of bankruptcy law. Bankruptcy and Credit Card Debt: Is There A Causal Relationship? Summary Personal bankruptcy filings now exceed one million per year. Why should bankruptcies have risen to record levels during a period when the economy has enjoyed two of the longest peacetime expansions in history, with unemployment, inflation, and interest rates all falling? Something must have changed in household finance; credit cards are among the “usual suspects.” Credit cards figure prominently in the debate over bankruptcy reform. Credit card lenders argue that bankruptcy makes it is too easy for debtors to avoid paying their debts, creating an incentive for reckless or fraudulent borrowing and exacerbating recent losses to credit card loan portfolios.
    [Show full text]
  • Personal Bankruptcy Protection and Household Debt
    Personal Bankruptcy Protection and Household Debt Felipe Severino ⇤ Meta Brown Dartmouth College FRB of New York October 2016 Abstract Personal bankruptcy laws provide defaulters with partial protection of assets from unsecured creditors. Increasing bankruptcy protection can increase credit demand through improved risk sharing, especially from risk averse borrowers, while diminishing the collateral value of assets and reducing borrowers’ access to credit. Using changes in bankruptcy protection across US states over time, we show that these laws increase borrowers’ holdings of unsecured credit, but not secured debt (mortgage and auto loans). We also find an increased interest rate for unsecured credit only. These e↵ects are predominantly driven by lower-income higher home ownership areas (where increased bankruptcy protection explains 10% to 30% of unsecured debt growth). Using individual data, we find on average no measurable increase in delinquency rates of households in the subsequent three years, an e↵ect mainly explained by homeowners’ increasing debt without defaulting. These results suggest that increased bankruptcy protections did not reduce the aggregate level of household debt, but a↵ected the composition of borrowing. ⇤Corresponding author: [email protected]. We thank Manuel Adelino, Adrien Auclert, Jean- Noel Barrot, Asaf Bernstein, Laurent Calvet, Ing-Haw Chen, Hui Chen, David Colino, Marco Di Maggio, Sebastian Di Tella, Xavier Giroud, Raj Iyer, Benjamin Keys, Henry Korytkowski, Erik Loualiche, Deborah Lucas,
    [Show full text]
  • Household Consumption and Personal Bankruptcy1
    Household Consumption and Personal Bankruptcy1 Ning Zhu University of California, Davis Current draft: September 2008 1 Zhu is from University of California, Davis and can be reached by phone at 530-752-3871 or by email at [email protected]. Duy Bui, Amand Kimball, Yamei Li, and Lara Remke provided tremendous help in assembling the data. The author benefits from helpful comments from Douglas Baird, Brad Barber, Arturo Bris. Sridhar Bharath, Terry Odean, Matt Spiegel, Chih-Ling Tsai, Ivo Welch, and Michelle White. Arthur Kennickell provided great help with the Survey of Consumer Finance data and some summary statistics. I am solely responsible for any remaining errors. 1 Household Consumption and Personal Bankruptcy Abstract This paper utilizes the population of personal bankruptcy filings in the state of Delaware during 2003 and finds that household expenditures on durable consumptions, such as houses and automobiles, contribute significantly to personal bankruptcy. Adverse medical conditions also lead to personal bankruptcy filings, but other adverse events such as divorce and unemployment have marginal effects. Over-consumption makes households financially over-stretched and more susceptible to adverse events, which reconcile the strategic filing and adverse event explanations. 2 Personal bankruptcy has emerged from relatively rare household event a couple of decades ago to a fairly common occurrence nowadays. According to the American Bankruptcy Institute, there were a total of 2,039,214 personal bankruptcies in 2005, compared to 412,510 filings in 19852. During the same period, personal bankruptcy filings rose from 0.3 percent to 1.8 percent of total households and the ratio of consumer filings to total bankruptcy filings climbed from 82.72 percent to 98.11 percent.
    [Show full text]
  • Personal Bankruptcy Michelle J
    CESifo, a Munich-based, globe-spanning economic research and policy advice institution VOLUME 13, N O . 4 WI N TER 2 015 Forum PERSONAL BANKRUPTCY Michelle J. White Stefania Albanesi and Jaromir Nosal Ron Harris and Asher Meir Jeffrey Traczynski Frank M. Fossen and Johannes König Michel Robe and Eva Maria Steiger Research Report ENVIRONMENTAL REGULATION AND Sylwia Bialek and FOREIGN DIRECT INVESTMENT: Alfons J. Weichenrieder THE ROLE OF MODE OF ENTRY Reform Model TOWN TWINNING AND Steven Brakman, GERMAN CITY GROWTH Harry Garretsen and Abdella Oumer Database ASYLUM IN EUROPE WORKPLACE REPRESENTATION IN EUROPE WORLDWIDE WATER SCARCITY FEMALE REPRESENTATION IN POLITICS News NEW AT DICE DATABASE, CONFERENCES, BOOKS THE DATABASE FOR INSTITUTIONAL COMPARISONS IN EUROPE The Database for Institutional Comparisons in Europe – DICE – was created to stimulate the political and academic discussion of institutional and economic policy reforms. DICE is a unique database offering comparative information on national institutions, regulations and economic policy. Although DICE is not a statistical database, it also contains data on the outputs (economic effects) of institutions and regulations where relevant. DICE covers a broad range of institutional themes: Business and Financial Markets, Education and Innovation, Energy and Natural Environment, Infrastructure, Labour Market and Migration, Public Sector, Social Policy, Values and Other Topics. The information is presented in tables (text or data), graphics (interactive application Visual Storytelling), and reports. In most cases, all EU countries are covered as well as some other major OECD countries. Users can choose between current comparisons and time series that show developments over time. DICE combines systematic information from a wide range of sources, presenting a convenient one-stop service for your data needs.
    [Show full text]
  • The Impact of Housing Credit on Personal Bankruptcy
    The Impact of Housing Credit on Personal Bankruptcy Sumit Agarwal† and Changcheng Song‡ Dec 2015 Abstract We use a linked housing transaction dataset and a personal bankruptcy dataset to study the impact of housing credit on personal bankruptcy in Singapore. Using a difference-in- differences (DD) approach, we find that an increase in housing credit increases the monthly instalment by 460-800 Singapore dollar, and increases the likelihood of personal bankruptcy by 0.15-0.22 percentage points for house buyers who have more exposure to the housing credit increase. To investigate the mechanisms, we show that the observed effect is unlikely to be driven by composition and selection of irresponsible buyers. The effect is mainly due to the increasing debt burden. JEL Classification: D14, R30, E51 Keywords: Personal Bankruptcy, Housing Market, Housing Credit Policy, Loan-to-Value Ratio, Household Finance, Real Estate __________________________________________________________________________________ ∗ We benefited from the comments of Chris Carroll, Souphala Chomsisengphet, Tullio Jappelli, David Laibson, Jessica Pan, Jonathan Parker, Ivan Png, Nagpurnanand Prabhala, Tarun Ramadorai, David Reeb, Amit Seru, Nick Souleles, Bernard Yeung, and seminar participants at the National University of Singapore. All errors are our own. †Departments of Finance and Real Estate, National University of Singapore, BIZ1-07-69, Mochtar Raidy Building, 15 Kent Ridge Drive, Singapore, 119245, Singapore (email: [email protected]) ‡ Department of Economics, National University of Singapore, 1 Arts Link, AS2 05-37, Singapore, 117570, Singapore (email: [email protected]) 1 I. Introduction What is the impact of housing credit on house buyers? Standard economic theory suggests that housing credit can facilitate consumption-smoothing for house buyers.
    [Show full text]
  • New Application
    PAWNBROKER MAIN OFFICE APPLICATION Ohio Pawnbroker Act Ohio Revised Code Sections 1321.21; 4727.01 to 4727.22 and 4727.99 Ohio Administrative Code Chapter 1301:8-5 Ohio Department of Commerce Division of Financial Institutions 77 South High Street, 21st Floor Columbus, OH 43215-6120 Telephone: (614) 728-8400 www.com.ohio.gov/fiin WARNING: It is a crime to provide a false statement to a government official or public agency. R.C. 2921.13. "An Equal Opportunity Employer and Service Provider" PAWNBROKER MAIN OFFICE APPLICATION CHECKLIST The Application submission must include the following: Fee o $500 per location if license is issued between 1/1 and 6/30 of even-numbered year; or, o $800 per location if license is issued any other time o Make check payable to Ohio Division of Financial Institutions Application – Starts on Page 2 o Submit Document Samples with the Application. Application Attestation – Page 12 Company Resolution – (not required for Sole Proprietors) Sample Form on Page 13 Schedule A Forms for Each Required Individual – Instructions on Page 14 o Disclosure Form o Schedule A: Residential & Employment History o Schedule A: Attestation Ownership Disclosure – Page 20 o Identify persons that own or control, directly or indirectly, 5% or more of the applicant Management Disclosure – Page 20 o Identify the senior managers/officers of the applicant Financial Statement: Dated within 90 days prior to the application submission – Page 22 Consent to Service and Jurisdiction – Page 23 Office Manager Statement – Page 24 Background Check – Instructions on Page 25 Criminal History Statement – Page 27 PB App 1 7/2020 PAWNBROKER LICENSE APPLICATION The Company Application is the licensing form used by companies and sole proprietors to apply for any non-depository, financial services license authority with Ohio.
    [Show full text]
  • Bankruptcy Reform and Credit Cards
    NBER WORKING PAPER SERIES BANKRUPTCY REFORM AND CREDIT CARDS Michelle J. White Working Paper 13265 http://www.nber.org/papers/w13265 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 July 2007 I am grateful to Jim Hynes, Richard Hynes, Eva-Marie Steiger, Andrei Schleifer, Tim Taylor, and Jeremy Stein for very helpful comments. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. © 2007 by Michelle J. White. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Bankruptcy Reform and Credit Cards Michelle J. White NBER Working Paper No. 13265 July 2007 JEL No. G21,G28,G33,K35 ABSTRACT From 1980 to 2004, the number of personal bankruptcy filings in the United States increased more than five-fold, from 288,000 to 1.5 million per year. Lenders responded to the high filing rate with a major lobbying campaign for bankruptcy reform that led to the adoption in 2005 of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which made bankruptcy law much less debtor-friendly. The paper first examines why bankruptcy rates increased so sharply. I argue that the main explanation is the rapid growth in credit card debt, which rose from 3.2% of U.S. median family income in 1980 to 12.5% in 2004. The paper then examines how the adoption of BAPCPA changed bankruptcy law. Prior to 2005, bankruptcy law provided debtors with a relatively easy escape route from debt, since credit card debt and other types of debt could be discharged in bankruptcy and even well-off debtors had no obligation to repay.
    [Show full text]