Jump to ContentJump to Main Navigation
Law and PsychologyCurrent Legal Issues Volume 9$
Users without a subscription are not able to see the full content.

Belinda Brooks-Gordon and Michael Freeman

Print publication date: 2006

Print ISBN-13: 9780199211395

Published to Oxford Scholarship Online: March 2012

DOI: 10.1093/acprof:oso/9780199211395.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 25 May 2020

Consumer Bankruptcy Reform and the Heuristic Borrower

Consumer Bankruptcy Reform and the Heuristic Borrower

(p.446) 25 Consumer Bankruptcy Reform and the Heuristic Borrower
Law and Psychology

Susan Block-Lieb

Edward J Janger

Oxford University Press

In April 2005, the US Congress enacted, and President Bush signed into law, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the ‘Bankruptcy Bill’), which made radical amendments to the US Bankruptcy Code. These changes had the principal effect of restricting the ability of consumers to discharge debt in bankruptcy. The Bankruptcy Bill was presented by its proponents – representatives of the consumer credit industry – as protecting innocent lenders from being duped. These proponents contributed vast sums to sympathetic legislators, and to legislators who they hoped would become sympathetic. This chapter explores whether the picture of the paradigmatic debtor they paint is empirically accurate. It shows that the factual assertions that ostensibly motivated the Bankruptcy Bill are belied by data and the consumer credit industry's own behaviour. It suggests an alternate story that is both more plausible, and more problematic. Consumers do not overborrow in reliance on the availability of the bankruptcy discharge. Instead, they borrow honestly, but heuristically, often in response to aggressive solicitations, and default if (and, by and large, only if ) their debt load becomes crushingly great.

Keywords:   Bankruptcy Bill, consumers, borrowing, debt, debtors

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .