Live Longer After Filing Bankruptcy? Economists Say “Yes”

Live Longer After Filing Bankruptcy? Economists Say “Yes”.

A recent study by the National Bureau of Economic Research suggests that those who file for Chapter 13 bankruptcy whose cases were confirmed and completed through discharge derive significant economic and health benefits from their filings as compared to Chapter 13 debtors whose cases were dismissed.

The study compared 500,000 bankruptcy records with tax records and foreclosure records.

The study compared people whose cases were approved and completed successfully to discharge to those whose cases were dismissed.

Successful Chapter 13 debtors:

  • saw annual earnings 25% higher after bankruptcy – compared to their pre-bankruptcy earnings. Dismissed filers saw no increase in earnings
  • had a higher employment rate
  • had a 30% lower mortality rate compared to filers whose cases were dismissed
  • were 19% less likely than dismissed filers to lose a home to foreclosure

The study authors suggest that successful Chapter 13 filers have an increased incentive to work and increased economic stability following receipt of bankruptcy protection.

It is good to see that objective economic analysis proves that bankruptcy does have a positive impact on those who file as well as our economy as a whole.