1. Law and Economics-Charles W. Upton Personal Bankruptcy

2. Individuals get over their head, and bankruptcy law should bail them out. General principle: satisfy creditors to the extent possible.

3. Personal Bankruptcy The Cost Sally’s Demand for Loans

4. Personal Bankruptcy The Cost roro r1r1 QoQo Q1Q1 With optimal bankruptcy protection for creditors

5. Personal Bankruptcy The Cost r1r1 Q1Q1 Interest rate and amount Sally borrows without optimal bankruptcy protection for creditors

6. Personal Bankruptcy The Cost roro r1r1 Q1Q1 QoQo Transfer, Sally saves in interest, loses if bankruptcy

7. Personal Bankruptcy The Cost roro r1r1 Q1Q1 QoQo DWL

8. Personal Bankruptcy The Economics of Recycling roro r1r1 Q1Q1 QoQo DWL Do these graphs look familiar? They should. But then this is the same argument.

9. Personal Bankruptcy End ©2004 Charles W. Upton