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A Sample of Historical Bankruptcy Cases

Over 34 million individuals and businesses have used the federal bankruptcy law since 1898. Would you be surprised to find out that researchers and policymakers interested in studying the causes and consequences of bankruptcy can readily download detailed information about just a few hundred bankrupt households and virtually no bankrupt businesses? Our project aims to stimulate interdisciplinary research on the causes and consequences of bankruptcy and on the history of credit markets more generally by 1) photographing key documents from a representative sample of cases filed under the bankruptcy laws of 1898 and 1978 through partnership with the National Archives, 2) constructing a data set from the information on the key documents, and 3) distributing the data for widespread use through the Inter-university Consortium for Political and Social Research (ICPSR).

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Collaborative Research: Opening New Views into Bankruptcy and Credit Markets Using Court Records (with Mary E. Hansen)
National Science Foundation

There have been more than 40 million personal and business bankruptcy filings in the U.S. since 1898, but there is no good, publicly-available data set to support research on the functioning of the bankruptcy system and the influence of bankruptcy on the economy. This award supports the creation and distribution of data constructed from original court records and is part of a larger project that has a goal of producing a data set representative of all bankruptcy cases filed between 1898 and the advent of electronic court records in the 1990s. The data set will include details of the progress of cases through the legal system and details of the liabilities, assets, and incomes of households and businesses. The data will be distributed through the Interuniversity Consortium for Political and Social Research and are expected to stimulate research across the social sciences. This data will provide researchers new ways to investigate trends in bankruptcy over time and correlates across space. Examples of such research topics are: the impact of bank bailouts in the 1930s, trends in filings by women and minorities, variation in outcomes of filings across local courts within federal court districts, the impact of Medicare on the medical debt of the bankrupt, the impact of federal emergency aid on bankruptcy, potential abuse of the law through so-called ‘strategic’ filing, the effect of regulations on high-interest credit on the debts of the bankrupt, the impact of the time-to-resolution of debt obligations on recovery from recession, and racial disparities in the use of the bankruptcy law. The new data will also support research beyond bankruptcy and will be of use to scholars in other fields like legal studies and history. The research conducted with the new data has the potential to impact private legal practice, official court practice, and policy set by legislatures, state financial regulators, the Consumer Financial Protection Bureau, and the Federal Reserve. The research may also be used by consumer advocates to design materials for financial education to enhance household financial well-being.

Emergency Preservation of Federal Bankruptcy Court Records, 1940-2000 (with Mary E. Hansen)
Institute for New Economic Thinking

We will document long-run trends in personal bankruptcy, with special emphasis on the use of the bankruptcy law at the local level and among women. Existing sources of data on bankruptcy are inadequate for careful analysis local or disaggregated trends. In order to facilitate basic research on this important, timely, and policy-relevant topic, we pilot the construction of a data set from original bankruptcy case files, many of which will soon be destroyed because of the high cost of storing them. For this pilot, we will preserve a 1% sample of bankruptcy cases filed Maryland and Eastern Virginia from 1940-2000, and we will make data from the case files available for public use. We then plan to create a data set that covers the entire U.S. from passage of the 1898 Bankruptcy Act to the roll-out of electronic bankruptcy records. The case files contain detailed data about household and business finance, so our work will enable a wide range of research on the impact of financial innovations and instability on households and firms.

Digital Preservation of Bankruptcy Court Records, 1898-2000 (with Mary E. Hansen)
The Alfred P. Sloan Foundation

We will digitize original bankruptcy case files to encode the first long-run mico-level data set on bankruptcy. Our data set will provide answers to basic questions about indebtedness and bankruptcy, will allow policy makers to better anticipate the effects of proposed changes in credit law, and will be used by consumer advocates to design materials for financial education.

Creating a Data Set of Bankrupt Households
Rutgers University

My research objective is to document long-run trends in bankruptcy. In particular, I will investigate bankruptcy trends across small geographic regions (such as divisions) as well as bankruptcy trends across gender. In order to facilitate research on this important, timely, and policy-relevant topic, I will create a micro-level data set of bankrupt households. With support from the Institute for New Economic Thinking (INET) and the Alfred P. Sloan Foundation, we are creating digital images (i.e. .jpg files) of approximately 78,000 bankruptcy cases (1 percent) filed in 24 states between 1898 and 2000. These digital images include approximately 7,600 bankruptcy cases filed in Maryland and the Eastern District of Virginia between 1940 and 2000 (joint work with Dr. Mary Hansen from American University). With this research grant I will construct a data set from the 7,600 bankruptcy case files from Maryland and the Eastern District of Virginia and make the data set publicly available through the Inter-university Consortium on Political and Social Research (ICPSR).