Recent CBP Publications

 

Portraits of Bankruptcy Filers, 56 Georgia Law Review (forthcoming) (Pamela Foohey, Robert M. Lawless, Deborah Thorne)

One in ten adult Americans have turned to the consumer bankruptcy system for help. In this Article, we use CBP data from 2013 to 2019 to describe who is using the bankruptcy system, providing the first comprehensive overview of bankruptcy filers in thirty years. We use principal component analysis to leverage these data to identify distinct groups of people who file bankruptcy. This technique allows us to situate the distinctions among filers’ financial and household situations within what bankruptcy laws and courts can and cannot provide. We critique the consumer bankruptcy system, based on the totality of people who have used it recently, to identify avenues for reforming bankruptcy and to underscore the broader economic, racial, and social issues that consumer bankruptcy filings highlight.

Driven to Bankruptcy, 55 Wake Forest Law Review 287 (2020) (Pamela Foohey, Robert M. Lawless, Deborah Thorne)

Over the last ten years, 15.1 million people filed for bankruptcy owning 16.4 million cars. These cars provided access to work, education, medical care, childcare, food, and other life necessities. They also were major household investments, the most expensive asset most bankruptcy filers owned other than a house. Using data from the CBP, we document what happens to car owners and their car loans when they enter bankruptcy.

    In How Often Do Debtors Seek to Reaffirm Auto Loans? A Report Based on Consumer Bankruptcy Project Data, 39-1 American Bankruptcy Institute Journal 46 (2020), we provide a summary of our findings about how people attempt to keep their cars through bankruptcy.

 

Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society, Sociological Inquiry (online version September 2019) (Deborah Thorne, Pamela Foohey, Robert M. Lawless, Katherine Porter)

The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the CBP, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect.

 

Medical Bankruptcy: Still Common Despite the Affordable Care Act, 109 American Journal of Public Health 431 (2019) (David U. Himmelstein, Robert M. Lawless, Deborah Thorne, Pamela Foohey, Steffie Woolhandler)

Illnesses and medical expenses take a toll on American families. The CBP survey asks debtors what contributed to their bankruptcy filings and provides debtors with several options, two of which are medical expenses and illness-related work loss. Two-thirds of debtors cite at least one of these two medical contributors—equivalent to about 530,000 “medical bankruptcies” per year. In addition, a similar share of debtors reported a medical contributor to their filings before and after the Affordable Care Act (ACA)’s implementation. Despite gains in coverage and access to care from the ACA, our findings suggest that it did not change the proportion of bankruptcies filed in the wake of illness and medical expenses.

 

Life in the Sweatbox, 94 Notre Dame Law Review 219 (2018) (Pamela Foohey, Robert M. Lawless, Katherine Porter, Deborah Thorne)

The time before a person files bankruptcy is sometimes called the financial “sweatbox.” Using data from the CBP, we find that people are living longer in the sweatbox before filing bankruptcy than they have in the past. We also describe the depletion of wealth and well-being that defines people’s time in the sweatbox. For those people who struggle for more than two years before filing bankruptcy — the “long strugglers” — their time in the sweatbox is particularly damaging. During their years in the sweatbox, long strugglers deal with persistent collection calls, go without healthcare, food, and utilities, lose homes and other property, and yet remain ashamed of needing to file. Our findings challenge longstanding narratives about who files bankruptcy and why. These narratives underlie our laws, influence how judges rule in individual cases, and affect how attorneys interact with their clients.

 

“No Money Down” Bankruptcy, 90 Southern California Law Review 1055 (2017) (Pamela Foohey, Robert M. Lawless, Katherine Porter, Deborah Thorne)

A crucial decision for consumer debtors is whether to file chapter 7 or chapter 13. Almost all consumers will hire a bankruptcy attorney. Attorneys charge about $1,200 to file a chapter 7 bankruptcy, an amount they generally require their clients to pay upfront. Attorneys charge about $3,200 to file a chapter 13 bankruptcy, but clients can pay this amount over time as part of their cases. Chapter 7 and 13 bankruptcies are vastly different, including the relief achieved. Almost all chapter 7 cases end with the debtor receiving a discharge of debts. In contrast, only around one-third of chapter 13 cases end in discharge. Relying on CPB data, we expose the increasingly prevalent phenomenon of debtors paying nothing in attorneys’ fees to file chapter 13. Our data suggest that these “no money down” debtors are similar to those who use chapter 7. As such, because they cannot afford to pay their attorneys up front, these debtors seem to pay $2,000 more and have their cases dismissed at a rate 18 times higher than if they had filed chapter 7.

    In Attorneys’ Fees and Chapter Choice: Exploring “No Money Down” Chapter 13 Bankruptcy, 36-6 American Bankruptcy Institute Journal 20 (2017), we provide a summary of “No Money Down” Bankruptcy.