Auto Credit and the 2005 Bankruptcy Reform: The Impact of Eliminating Cramdowns

• 成果类型: Article
• 署名作者: Chakrabarti, Rajashri; Pattison, Nathaniel
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York; Southern Methodist University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz039
• 发表日期: 2019
• 页码: 4734
• 关键词: personal bankruptcy; consumer bankruptcy; mortgage; MARKET; LAW; CONSEQUENCES; determinants; lawyers; BAPCPA

摘要

Auto lenders were perhaps the biggest winners of the 2005 Bankruptcy Reform, as Chapter 13 bankruptcy filers can no longer cramdown the amount owed on recent auto loans. We estimate the causal effect of this anticramdown provision on the price and quantity of auto credit. Exploiting historical variation in states' usage of Chapter 13 bankruptcy, we find strong evidence that eliminating cramdowns decreased interest rates and some evidence that loan sizes increased among subprime borrowers. The decline in interest rates is persistent and is robust to a battery of sensitivity checks. We rule out other reform changes as possible causes.