Journal of Family and Economic Issues

, Volume 29, Issue 2, pp 219–233 | Cite as

Consumer Debt Repayment Behavior as a Precursor to Bankruptcy

Original Paper


The passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 culminated years of debate over the escalating number of bankruptcy filings and whether or not consumers were abusing the bankruptcy system. Our study focuses on the extent to which households seek bankruptcy protection without first attempting to restructure their debt or experiencing indicators of financial distress. Through multivariate regression analyses of longitudinal data from the Panel Study of Income Dynamics (PSID), we find a significant relationship between having prior financial problems and filing for bankruptcy. Our results also indicate that households that obtained consolidation loans were equally likely to file for bankruptcy as those that did not. We conclude that early interventions with financially distressed consumers may provide opportunities to reduce bankruptcy filings.


Bankruptcy Bankruptcy abuse Bankruptcy Abuse Prevention and Consumer Protection Act Consumer debt Financial problems 


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Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  1. 1.Department of Housing and Consumer EconomicsUniversity of GeorgiaAthensUSA
  2. 2.Department of Human Development and Family StudiesIowa State UniversityAmesUSA

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