Bankruptcy Lawyers and Credit Recovery

A previous version of this working paper was originally published in April 2024.

The author documents a significant advertising effect on filing rates and subsequently shows that ad exposure is associated with better post-bankruptcy financial outcomes. He then characterizes how ad-induced filers are different from existing filers in terms of case, financial, and credit variables. He finds that ad-induced filers are more likely to receive a discharge, file with lawyer representation, and be first-time filers. He interprets these findings as evidence that bankruptcy law firm advertisements help mitigate under-information and stigma in bankruptcy.