One subject of debate amid this rising number of bankruptcies is how personal bankruptcy laws deal with residential housing. This subject centers on two main issues: First, how do personal bankruptcy laws affect the availability of mortgages and the terms on which borrowers obtain mortgages? Second, how do personal bankruptcy filings affect the outcome of mortgage foreclosures? In this article, Wenli Li discusses these questions and examines the economic literature to shed some light on the legislative and policy debates that are likely to recur after the current crisis is over.

This article appeared in the Second Quarter 2009 edition of Business Review.

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