Can bankruptcy can play a role in stemming the tide of rising inequality? Economists think maybe it can.
A whitepaper released by the National Bureau of Economic Research found that the bankruptcy code is an incredibly effective social insurance policy. According to their findings, getting approved for Chapter 13 bankruptcy protection “increases annual earnings by $5,562, decreases five-year mortality by 1.2 percentage points, and decreases five-year foreclosure rates by 19.1 percentage points.”
The whitepaper claims that bankruptcy protection helps workers earn more by removing the disincentive to work resulting from creditors garnishing worker’s paychecks. It also found that bankruptcy may help people live longer by removing a great deal of stress from their lives. Findings also provide further evidence that helping underwater borrowers modify their mortgages could provide huge benefits for those people, and the economy overall.
So, what are you waiting for? Contact Cossitt Law today to schedule an initial consultation.
Read more in this article at Fortune Magazine.
Read the whitepaper here.