The Law and Economics of Consumer Finance

Hynes, Richard M.; Posner, Eric A.

doi:10.1093/aler/4.1.168

Cited by 86 publications

(2 citation statements)

References 106 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…For a more complete description of the bankruptcy process, see the Administrative Office of the United States Courts (1998). Hynes and Posner (2002) also provide background information from a law and economics perspective. For UI and AFDC, two relevant features are discussed.…”

Section: Description Of Personal Bankruptcy Ui and Afdcmentioning

confidence: 99%

The Effect of Unemployment Benefits, Welfare Benefits, and Other Income on Personal Bankruptcy

Fisher

2005

Contemporary Economic Policy

View full text Add to dashboard Cite

Personal bankruptcy, unemployment insurance, and Aid to Families with Dependent Children provide income and wealth insurance. Because they have similar purposes, it should not be surprising that some households use more than one of these programs or that the programs are substitutes. This study contributes to the personal bankruptcy literature by examining this interaction and finds that increases in unemployment benefits decrease the probability of bankruptcy. (JEL D12, K35)

show abstract

Section: Description Of Personal Bankruptcy Ui and Afdcmentioning

confidence: 99%

The Effect of Unemployment Benefits, Welfare Benefits, and Other Income on Personal Bankruptcy

Fisher

2005

Contemporary Economic Policy

View full text Add to dashboard Cite

show abstract

“…While these can be severely adverse outcomes for households, they occur at some delay relative to repossession. 14 In response to the Covid-19 crisis, lenders have announced a variety of programs to provide some flexibility to borrowers. 15 Some programs include suspensions of involuntary auto repossessions.…”

Section: Auto Loansmentioning

confidence: 99%

What Are the Consequences of Missed Payments on Consumer Debts?

Lanning¹,

Rose²

2020

CFL

View full text Add to dashboard Cite

In order to understand better how the unfolding economic crisis is likely to affect U.S. households, this Chicago Fed Letter looks at what happens when borrowers miss debt payments and how long it takes for them to face a severe adverse consequence, such as foreclosure, wage garnishment, or repossession. In summary, a household would face the fastest repercussion if they were to miss a payment on an auto, credit card, or payday loan (see figure 1). In response to delinquency, auto lenders can initiate repossession, while the main recourse of payday and credit card lenders is to cut off further access to credit. Auto loans are an area of particular concern, as they had relatively poor credit quality before the Covid-19 crisis began. In contrast, mortgages and student loans typically allow borrowers much longer periods to get back on track with their payments. Moreover, mortgage and student loan borrowers are likely to receive extensive forbearance through recently announced federal government initiatives. We highlight three implications for households. First, liquidity-constrained subprime borrowers can quickly lose access to their marginal sources of credit, e.g., payday loans, credit card loans, and alternative or subprime auto loans. These households, if they experience unemployment, may be able to avoid default if they receive extended unemployment benefits and other assistance established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 1 One critical question is how fast people will receive this assistance. For example, will state unemployment offices have the capacity to deliver assistance in a two-to four-week period that is typical during normal times? Liquidity-constrained subprime borrowers will be especially at risk if assistance is significantly delayed. Second, for borrowers with better credit scores, the combination of savings, forbearance initiatives, along with CARES Act and unemployment assistance, will likely be enough to enable these households to make payments or ward off adverse repercussions from missed payments for several months. This is especially true for households whose main debts are mortgage or student loans, which have long fuses (that is, a long time before adverse consequences occur if a payment is missed) and for which federal authorities have announced wide-reaching forbearance plans. Third, households may face important choices about which debts to pay. These choices will be shaped by the institutional features and forbearance initiatives described here-which might nudge borrowers Auto loans are an area of particular concern, as they had relatively poor credit quality before the Covid-19 crisis began.

show abstract

Sweet Spots or Dark Corners? An Environmental Sustainability View of Big Data and Artificial Intelligence in ESG

Crona

Sundström

2023

Handbook of Big Data and Analytics in Accounting and Auditing

View full text Add to dashboard Cite

The Law and Economics of Consumer Finance

Cited by 86 publications

References 106 publications

The Effect of Unemployment Benefits, Welfare Benefits, and Other Income on Personal Bankruptcy

The Effect of Unemployment Benefits, Welfare Benefits, and Other Income on Personal Bankruptcy

What Are the Consequences of Missed Payments on Consumer Debts?

Sweet Spots or Dark Corners? An Environmental Sustainability View of Big Data and Artificial Intelligence in ESG

Contact Info

Product

Resources

About