Personal Bankruptcy Research Articles

Between restriction and protection: the experience, problems, and improvement path of judicial recognition of personal bankruptcy exempt property in China

Personal bankruptcy exempt property refers to the property retained to ensure future survival and development to safeguard the basic life, career development, and other rights and interests of the debtor and dependents. It is a strong solution to the problems of the right to survival and development of the honest but unfortunate debtor, among other things. This thesis handles the Personal Bankruptcy Regulations of Shenzhen, the personal bankruptcy judicial documents, and judicial cases issued by the courts as samples and comprehensively analyzes the problems in the judicial practice of exempting property from personal bankruptcy in China. It innovatively proposes that the scope of recognition of exempted property adopts “inflation as the main approach” and sets up exceptions to protect the interests of creditors and debtors through the principle of “balance of interests”; Construct a recognition standard that “only specifies the types of property” and sets regional limits, protecting and limiting the rights of debtors under the principle of moderate protection; Implement the construction model of exemption property that combines “enumeration” and “generalization”, and under the guidance of the “flexibility principle”, establish a scope of exemption property that is in line with China’s national conditions. This study provides a new sample for international comparative research on the system of personal bankruptcy exempt property. It gives a new direction for exploring the judicial recognition of personal bankruptcy exempt property in China.

Personal Bankruptcy Prediction Using Logistic Regression Model

According to the Insolvency Department of Malaysia, as of December 2023, 233,483 Malaysians are currently involved in bankruptcy cases due to their defaults on hire purchase loans, credit card loans, personal loans, housing loans, and business loans. This is indeed a critical issue because the growing number of personal bankruptcy cases will hurt the Malaysian economy as well as society. From an individual's economic perspective, bankruptcy minimizes their chances of getting a job. Apart from that, their accounts will be frozen, they will lose control of their properties and assets, and they will not be allowed to start any business or be a part of any company's Board of Directors. Bankrupts also will be rejected from any loan application. This paper examines this problem by developing a personal bankruptcy prediction model using the logistic regression technique. This paper defines "bankrupt" as terminated members who failed to settle their loans. The sample comprised 24,546 cases with 17% settled cases and 83% terminated cases. The data included a dependent variable, i.e., bankruptcy status (Y=1(bankrupt), Y=0(non-bankrupt)), and 12 predictors. Upon completion, this paper succeeds in coming out with a reliable personal bankruptcy prediction model and significant variables of personal bankruptcy. The findings of this paper are very beneficial and significant to creditors, banks, the Malaysia Department of Insolvency, potential borrowers, members of AKPK, and society in general in raising awareness of personal bankruptcy risks and such information may help them to take preventive measures in minimizing the number of personal bankruptcy cases.

It’s not (only) personal, it’s business: personal bankruptcy exemptions and business credit

Abstract In the USA, state-level exemptions determine the amount of property that individuals can protect from creditor liquidation during the debt settlement process. We exploit within-metropolitan statistical area variation in personal bankruptcy exemptions created by state borders and a stacked regression approach to identify the spillover effects of these laws on business credit extended to small firms. Subsequent to exemption increases, we find a reduction of 1–2 percent in originations of business credit. The effect is strongest for the smallest firms, which are more financially constrained. We provide household-level evidence that both business debt and personal debt decline for borrowers whose home equity becomes covered by the exemption, suggesting an overall decrease in credit availability for small businesses. As a result, increases in exemptions lead to fewer small establishments and lower employment, especially in industries dependent on external finance, suggesting that negative real economic effects occur via a credit market channel.

‘I’m not going to feed the bailiffs’: personal bankruptcy and debtor agency in narrative accounts of struggling debtors

ABSTRACT The article uses the formal instrument of personal bankruptcy proceedings as an illuminating context to contribute to the scholarship on the lived experience of overindebtedness. Through the analysis of 29 in-depth interviews with heavy debtors living in Czechia, we provide a focus on debtor agency, exploring how bankruptcy interrelates with how struggling debtors narratively approach debt and construct their capacity to act. We show that first-hand accounts of (planned) participation in a bankruptcy proceeding contain a surprising number and variety of narratives of agency. Emphasizing the processual character of bankruptcy proceedings, we demonstrate that bankruptcy supports enactments of debtor agency by interfering in the temporal ordering of debt as performed by the struggling debtors, shaping the experiences of overindebtedness also among those debtors who have not (yet) entered the formal process. We show that the narrative constructions of agency as regards bankruptcy are often embedded in a neoliberal discourse of merit and self-responsibilization. While the respondents reproduce a largely depoliticized and individualized account of debt resistance that at times operates with a hierarchization of struggling debtors, disclosing bankruptcy (intentions) to others also evokes spontaneous and unorganized acts of solidarity within personal networks that empower debtors.

Study on the Legal Problems of the Exemption System of Personal Bankruptcy

The core of personal bankruptcy is the exemption system, which gives honest and unfortunate debtors a chance to start over and guarantees their basic rights of survival and development, is an important system for maintaining sound socio-economic functioning and for resolving difficult issues of court enforcement, not only in helping natural debtors in debt deadlocks in individual cases, but also in helping markets to recover as quickly as possible, thereby improving the overall well-being of society. However, throughout the world, whether it is a country that has established the personal bankruptcy system for a long time, or a country that is in the initial stage of exploring the personal bankruptcy system, personal bankruptcy exemption, a well-meaning legal system, has inevitably caused some negative effects and hindered the operation of the system as a whole. In order to guarantee the good operation of the personal bankruptcy exemption system in our country, we should establish such systems as the incentive system of the bankruptcy person with good faith and the property registration system to support the operation of the procedure, improve the link between personal bankruptcy exemption and civil law, Civil Procedure Law, company law, etc., in order to guarantee the validity and feasibility of personal bankruptcy exemption system, the procedures of debtor's application, administrator's opinion, Creditor's objection, relief and rescission are detailed.

The moral accounting of debts: productivity, deservingness and the consensual creation of Chapter XIII bankruptcy

Abstract Chapter XIII’s wage-earner payment plans are now the default form of personal bankruptcy in the USA. During the Great Depression, it was created as a voluntary choice and enacted with unanimous legislative support. Absent conflict between creditors and labor and social reformers, legislators agreed that Chapter XIII was for the benefit of both honorable insolvents and their fair creditors. How did wage-earner payment plans emerge out of a consensual legislative process? Employing a computational abductive approach on a wide range of legislative, media and bankruptcy records, I show that Chapter XIII’s creation was facilitated by a ‘moral accounting’ that, based on their race and gender identities, positively evaluated most White men bankruptcy petitioners as ‘deserving’, even as it recognized occupational variations in their economic ‘productivity’. This study highlights how racial discourses of ‘deservingness’ are central to the construction of credit markets as part of America’s submerged welfare state.

Personal bankruptcy costs, union bargaining power, and capital structure

We document that employee bankruptcy costs affect corporate capital structure decisions via their impact on the bargaining power of labor unions. We employ difference-in-differences and triple-difference research designs surrounding a major bankruptcy reform that increased personal bankruptcy costs. Our results suggest that, on average, this reform reduced unions’ bargaining power, resulting in a decrease in the financial leverage of unionized firms relative to nonunionized firms. Our results provide new evidence for a relatively unexplored determinant of capital structure—personal bankruptcy costs.

China's Path to the Construction of Personal Bankruptcy System

Personal bankruptcy system is a system that has been absent in China for a long time, the scale of over-consumption groups in China is expanding at this stage, the number of over-indebted people is increasing, and there are a large number of cases that are difficult to be executed or have no property to be broken in the court, which makes the construction of personal bankruptcy system more urgent. In this paper, the author discusses the value background, access rules and legal effects of the personal bankruptcy system, with the intention of constructing a personal bankruptcy system under the path of China.

Personal bankruptcy prediction using machine learning techniques

It has become crucial to have an early prediction model that provides accurate assurance for users about the financial situation of consumers. Recent studies focused on predicting corporate bankruptcies and credit defaults, not personal bankruptcies. Due to that, this study fills the literature gap by comparing different machine learning algorithms to predict personal bankruptcy. The main objective of the study is to examine the usefulness of machine learning models such as random forest, XGBoost, LightGBM, AdaBoost, CatBoost, and support vector machines in forecasting personal bankruptcy. The research relies on two samples of households (learning and testing) from the Survey of Consumer Finances, which was conducted in the United States. Among the estimated models, CatBoost and XGBoost showed the highest effectiveness. Among the most important variables used in the models are income, refusal to grant credit, delays in the repayment of liabilities, the revolving debt ratio, and the housing debt ratio.

Theoretical aspects of opening proceedings in the case of insolvency of a debtor – a natural person in accordance with the Code of Ukraine on bankruptcy procedures

The paper analyzes the theoretical aspects and legal norms regulating the procedure for initiating proceedings in cases of personal insolvency according to the Bankruptcy Procedures Code of Ukraine. It provides an in-depth analysis of Article 115 of the Code, which establishes the grounds for the court to decide to start examining a case of insolvency. This includes examining the debtor's inability to fulfill obligations to creditors, the absence of assets that can be subjected to enforcement, and other factors affecting the debtor's financial state. The paper delves into the legal intricacies and conditions under which a court can declare an individual insolvent, highlighting the critical importance of these conditions in protecting both the debtor and the creditors. Special attention is given to the importance of a detailed understanding and proper application of each norm, considering judicial practice and procedural nuances that can significantly affect the effectiveness and fairness of bankruptcy proceedings. The paper underscores the necessity for legal practitioners to be well-versed in these norms to navigate the complexities of insolvency cases effectively. It discusses how minor procedural missteps or misunderstandings of the law can lead to significant delays or even unjust outcomes, emphasizing the need for precision and thoroughness in legal proceedings. The role of the court is critically examined, particularly in ensuring an objective examination of the case circumstances. The court's duty is not limited to the evidence presented by the parties; it must also consider all relevant circumstances that might affect the case outcome. The paper highlights the court's subsidiary duty to assist the debtor in establishing the necessary circumstances for initiating proceedings, which is essential for ensuring that justice is served and that the debtor's rights are protected throughout the process. Furthermore, the paper discusses the broader implications of these legal norms and practices on the financial system and society. It considers how effective bankruptcy procedures can contribute to economic stability by providing a structured method for resolving insolvency issues. This, in turn, can encourage responsible lending and borrowing practices, as all parties have a clear understanding of the legal recourse available in cases of financial distress. This paper is particularly beneficial for lawyers, judges, and anyone interested in personal bankruptcy procedures, as it provides a comprehensive understanding of the procedural requirements and approaches used in Ukrainian legal practice. By offering detailed insights into the legal framework and practical applications of the Bankruptcy Procedures Code, it serves as a valuable resource for those involved in or studying insolvency law, helping to ensure that personal bankruptcy cases are handled with the highest standards of fairness and efficiency.

Недействительность части сделки как результат оспаривания соглашения об уплате алиментов в деле о банкротстве гражданина

This paper examines minors' rights to maintenance, parents' alimony obligations and their right to a reasonable amount of alimony versus bankruptcy creditor rights to fulfilment of obligations by insolvent alimony payors. Based on the analysis of judicial practice, the article considers the issue of challenging the alimony agreement concluded by the debtor in the personal bankruptcy case. The author studies the legal positions of arbitration courts and the Russian Supreme Court cases where the interests of children take priority over the interests of bankruptcy creditors in the challenges of alimony agreements.

Personal Bankruptcy is the“Underlying Logic”of the Specialized Bankruptcy Proceedings for Micro and Small Enterprises

Personal Bankruptcy is the“Underlying Logic”of the Specialized Bankruptcy Proceedings for Micro and Small Enterprises

Is rising student debt affecting retirement savings? Evidence from the survey of consumer finances

AbstractUsing exogenous changes in the personal bankruptcy treatment of student loans as well as the level of student debt, we find that student debt has a negative effect on household retirement savings. This negative relation is present for younger and older individuals, and is larger for the latter group, indicating lower levels of retirement savings for precisely those who can least afford it. We also find that student debt is related to greater borrowing on retirement plans. Households with more student debt expect to have insufficient retirement income and are less able to plan financially for the long term.

Debt relief for households in developing economies

Abstract Households in developing economies have greater access to formal credit today than at any point in history, owing to the global expansion of microfinance and recent innovations in consumer finance, such as digital lending. While this has improved the ability to smooth consumption and invest in productive activities, it has also raised concerns about over-indebtedness. Against this background, this article reviews and extends the literature on debt relief for households in developing countries. We begin by laying out a simple stylized model that illustrates the costs and benefits of debt relief and use the model to guide our review of the evidence on various relief policies, such as debt forbearance, debt forgiveness, and personal bankruptcy. We additionally present survey evidence from a population of microfinance and bank borrowers with recent exposure to debt relief. The results highlight that an important channel through which discretionary debt relief policies, which are common in developing countries, affect credit market outcomes is their impact on borrower expectations. The development of legal bankruptcy institutions that offer a rules-based avenue to discharge unsustainable debts can reduce such distortions and alleviate the credit market inefficiencies that have often accompanied debt relief initiatives in developing economies.

О проблеме дисбаланса рисков ответственности и вознаграждения финансового управляющего по делам о несостоятельности (банкротстве) граждан

The article shows the problem of imbalance of high liability risks and the amount of remuneration of a financial receiver as a reason for refusal to get involved in personal bankruptcy cases. The author evaluates the explanation of the Supreme Court of the Russian Federation that a citizen may be released of any debts if no candidate to the receiver position is submitted to court. The paper points out that such explanation can be used in exceptional cases only.

Does Personal Financial Distress Affect Workers’ Performance? Evidence From Real Estate Agents

This study examines how personal financial distress affects workers’ performance. Using the real estate brokerage industry as a setting and personal bankruptcy filing as a proxy for personal financial distress, we find that sale prices of agent-represented houses are lower in the year when agents are financially distressed than the non-distressed year, relative to the control group. We also find that the less desirable sales’ outcomes induced by distressed agents spill over to homeowners’ future buying activities. These owners subsequently buy houses with higher loan-to-value (LTV) ratios in lower-quality neighborhoods.

An empirical study of micro‐ and small‐enterprise bankruptcy protection under the COVID‐19 pandemic: New evidence from China

AbstractMicro‐ and small‐enterprises (MSEs) serve as a strong foundation for sustainable and stable economic and social development in countries worldwide. However, they are highly susceptible to bankruptcy crises, a phenomenon that has been significantly amplified by the COVID‐19 pandemic. The article presents an empirical investigation of the application of the bankruptcy system to MSEs, using data on MSE bankruptcies published by the Sichuan courts in China in 2020 during the COVID‐19 pandemic as evidence. The article reveals that MSEs face a triple dilemma when applying bankruptcy procedures. Firstly, the legal system for bankruptcy is unsound. Secondly, the institutional mechanism for bankruptcy is imperfect. And thirdly, the social environment surrounding bankruptcy is not conducive. The article presents a novel approach to address bankruptcy issues by suggesting the implementation of streamlined bankruptcy procedures, a reorganization system for small and micro‐enterprises and a personal bankruptcy system. Additionally, it proposes enhancing the institutional framework for the selection, evaluation and oversight of bankruptcy judges and administrators, as well as the establishment of third‐party institutions. Furthermore, it advocates for a modernized understanding of bankruptcy, the provision of pre‐bankruptcy services and the creation of a bankruptcy protection system. The article presents a unique sample of international comparative studies on MSEs and proposes a new approach to examining bankruptcy protection for MSEs in China.

Research on Legal Issues Related to the Regulation of Credit Information in Personal Bankruptcy

Research on Legal Issues Related to the Regulation of Credit Information in Personal Bankruptcy

Personal Bankruptcy Protection and Household Debt

Personal Bankruptcy Protection and Household Debt

Health Insurance Coverage and Personal Bankruptcy Reform

Health Insurance Coverage and Personal Bankruptcy Reform