Bankruptcy Filers’ Financial Behaviors: Are They Responsible?

The growing number of personal bankruptcy filers has spurred extensive literature about household financial conditions prior to bankruptcy filings or immediate financial benefits. Personal bankruptcy can be a turning point in the lives of financially troubled consumers, while personal bankruptcy can have a devastating effect on the filers’ credit information. Nevertheless, there has been a lack of attention on what happens to debtors after they file for bankruptcies. By using U.S. household- level data, this study investigates the financial behavior such as spending patterns and debt payment of personal bankruptcy filers. The findings from this study provide empirical evidence on the differences in financial behaviors between personal bankruptcy filers and non-filers.