An Equilibrium Model of the Timing of Bankruptcy Filings

Satyajit Chatterjee ()

No 487, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: Existing quantitative-theoretic models of bankruptcy do not make a distinction between bankruptcy and default. In reality, there is always a period of financial distress between default and a bankruptcy filing. The goal of this paper is to develop a model of the timing of bankruptcy filing that can account for financial distress (the period or state during which a delinquent debtor is being pursued by creditors) and informal bankruptcy (where a delinquent debtor does not file for bankruptcy but neither does she repay or be pursued by creditors). The model is used to shed light on time variation in the rate of bankruptcy filings during the last 25 years.

Date: 2015
New Economics Papers: this item is included in nep-dge
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Working Paper: An Equilibrium Model of the Timing of Bankruptcy Filings (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:487

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