Conference Time: 28th May 2024, 08:30:08pm EDT
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Please note that all times are shown in the time zone of the conference. The current conference time is: 28th May 2024, 08:30:08pm EDT
Track M2-2: Household Debt
Time:
Monday, 20/May/2024:
9:30am - 10:15am
Session Chair: Constantine Yannelis , University of ChicagoDiscussant: Christoph Herpfer , uva darden
Location: Room 1212
Presentations
Bankruptcy Lawyers and Credit Recovery
Brian Jonghwan Lee
Columbia Business School
I study how bankruptcy law firm advertisements affect credit recovery of households
in financial distress. Exploiting the border discontinuity strategy associated with the
geographic unit in which local TV advertisements are sold, I empirically uncover
bankruptcy filings and credit recovery related to exogenous variations in bankruptcy
law firm advertisements. I first document a significant advertising effect on filing
rates and show that advertising-induced filers are similar to existing filers. I then find
a positive effect of advertisements on credit outcomes including credit score, new
homeownership, and foreclosure. I interpret these findings as evidence that lawyers
address information frictions in households’ assessment of the bankruptcy option.