In Re the Small Debtor

Default Costs, Willingness to Pay and Sovereign Debt Buybacks

The arguments put forward by Bulow and Rogoff (1988, 1991) against sovereign debt buybacks are re-examined in a willingness-to-pay framework. This paper argues that the Bulow-Rogoff framework treats default by a debtor as an event with no dead-weight loss, and, as such, underestimates the potential gains from a buyback. The willingness-to-pay framework allows dead-weight costs of default to be ...

Does Debtor Protection Really Protect Debtors? Evidence from the Small Business Credit Market

This paper analyzes how different levels of debtor protection across U.S. states affect small firms’ access to credit, as well as the price and non-price terms of their loans. We use a measure of debtor protection that has its maximum value when the borrower’s home equity is lower than the state homestead exemption (debtor is fully protected), and is decreasing in the difference between the hom...

Debtor Rights, Credit Supply, and Innovation

Debtor-friendly laws can encourage innovation by reducing the cost of failure for innovators, but can also harm innovation if they tighten the availability of credit to innovators. We use state and year variation in U.S. personal bankruptcy laws, which affect the capital constraints of individual innovators and small firms, to investigate the effects of debtor protection on innovation. We find ...

The Denial of Future Tort Claims In re Piper Aircraft: Will the Court's Quick-Fix Solution Keep the Debtor Flying High or Bring it Crashing Down?

The Problem of Debt Overhand and How to Deal with It Senior Essay Seminar

Debt overhang in developing economies is an issue that must be addressed in order for these economies to grow. A debt burden that is high relative to the economy’s output results in a low credit rating by the rating agencies, which in turn leads to a higher price on further borrowing by the affected countries. Several remedies have been proposed (and used in practice) to resolve the problem of ...