Please use this identifier to cite or link to this item: http://bura.brunel.ac.uk/handle/2438/27289
Title: Consumer bankruptcy: Decision, choice and access to credit afterwards
Authors: Gumus, A
Kara, A
Ahmad, AH
Glass, K
Keywords: access to credit;adverse events;bankruptcy benefit;consumer bankruptcy;Great Britain;personal bankruptcy
Issue Date: 25-Jul-2023
Publisher: Wiley
Citation: Gumus, A. et al. (2023) 'Consumer bankruptcy: Decision, choice and access to credit afterwards', International Journal of Finance and Economics, 0 (ahead-of-print), pp. 1 - 27. doi: 10.1002/ijfe.2859.
Abstract: Copyright © 2023 The Authors. We examine the effects of the bankruptcy benefit and adverse events on the consumer bankruptcy decision. Employing zero-inflated ordered probit models and a unique longitudinal survey of approximately 66,000 individuals in Great Britain, we find that consumers are more likely to enter into bankruptcy proceedings when the bankruptcy benefit increases and when they become unemployed. We find that the effects of adverse events differ across bankruptcy types. Individuals who experience the onset of health problems are more likely to choose reorganization of debts (i.e., income gleaning), whereas individuals who get divorced or separated are more likely to prefer the discharge of debts (i.e., fresh start). We also examine access to credit after bankruptcy. We find that individuals are excluded from the credit markets post-bankruptcy and the impact differs across bankruptcy types. Credit exclusion for fresh starters is dramatic, swift but short-lived, while for income gleaners, it is gradual, slow but lasts longer.
Description: Data availability statement: The data that support the findings of this study are available from the UK's Office for National Statistics (ONS). Restrictions apply to the availability of these data, which were used under license for this study. Data are available from https://beta.ukdataservice.ac.uk/datacatalogue/series/series?id=2000056#!/access-data with the permission of ONS and UK Data Service.
URI: https://bura.brunel.ac.uk/handle/2438/27289
DOI: https://doi.org/10.1002/ijfe.2859
ISSN: 1076-9307
Other Identifiers: ORCID iDs: Alper Kara https://orcid.org/0000-0002-8560-0501; Ahmad Hassan Ahmad https://orcid.org/0000-0002-6004-0181.
Appears in Collections:Dept of Economics and Finance Research Papers

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