Collaborative Research: Opening New Views into Bankruptcy and Credit Markets Using Court Records

American University, Washington DC

Investigators

Abstract

There have been more than 40 million personal and business bankruptcy filings in the U.S. since 1898, but there is no good, publicly-available data set to support research on the functioning of the bankruptcy system and the influence of bankruptcy on the economy. This award supports the creation and distribution of data constructed from original court records and is part of a larger project that has a goal of producing a data set representative of all bankruptcy cases filed between 1898 and the advent of electronic court records in the 1990s. The data set will include details of the progress of cases through the legal system and details of the liabilities, assets, and incomes of households and businesses. The data will be distributed through the Interuniversity Consortium for Political and Social Research and are expected to stimulate research across the social sciences. This data will provide researchers new ways to investigate trends in bankruptcy over time and correlates across space. Examples of such research topics are: the impact of bank bailouts in the 1930s, trends in filings by women and minorities, variation in outcomes of filings across local courts within federal court districts, the impact of Medicare on the medical debt of the bankrupt, the impact of federal emergency aid on bankruptcy, potential abuse of the law through so-called 'strategic' filing, the effect of regulations on high-interest credit on the debts of the bankrupt, the impact of the time-to-resolution of debt obligations on recovery from recession, and racial disparities in the use of the bankruptcy law. The new data will also support research beyond bankruptcy and will be of use to scholars in other fields like legal studies and history. The research conducted with the new data has the potential to impact private legal practice, official court practice, and policy set by legislatures, state financial regulators, the Consumer Financial Protection Bureau, and the Federal Reserve. The research may also be used by consumer advocates to design materials for financial education to enhance household financial well-being.