BANKRUPTCY AND DELINQUENCY IN A MODEL OF UNSECURED DEBT

Autor:	Juan M. Sánchez, Xuan S. Tam, Kartik Athreya, Eric R. Young
Rok vydání:	2018
Předmět:	Economics and Econometrics Unsecured debt Reset (finance) media_common.quotation_subject 05 social sciences Consumer debt Monetary economics Payment Bankruptcy Loan Debt 0502 economics and business Juvenile delinquency Economics 050207 economics 050205 econometrics media_common
Zdroj:	International Economic Review. 59:593-623
ISSN:	0020-6598
DOI:	10.1111/iere.12281
Popis:	This article documents and interprets a fact central to the dynamics of informal consumer debt default. We observe that for individuals 60– 90 days late on payments, (i) 85% make payments during the next quarter, and (ii) 40% reduce their debt. To understand these facts, we develop a quantitative model of debt delinquency and bankruptcy. Our model reproduces the dynamics of delinquency and suggests an interpretation of the data in which lenders frequently reset loan terms for delinquent borrowers, typically offering partial debt forgiveness, instead of a blanket imposition of the “penalty rates†most unsecured credit contracts specify.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::c224845cf0f9160575f7835753fa3dea https://doi.org/10.1111/iere.12281 Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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