Interpreting Data: A Reply to Professor Pardo

Professor Pardo has published a pointed critique to our Report, raising three major complaints. First, he claims that we make two predicating assumptions in our study that are flawed. Second, he contends that we misunderstand the means test and fail to appreciate with sufficient nuance its operative effect. Third, he maintains that our Report suffers from methodological problems. We can address the two impugned assumptions quickly. The first one - that BAPCPA\u27s means test is the sole causal agent driving 800,000 putative filers from the bankruptcy courts - is not one we make. The second - regarding the income profiles of the missing 800,000 bankruptcy filers - is actually somewhat consistent with predictions Professor Pardo himself makes elsewhere in his critique. The thrust of Professor Pardo\u27s commentary, however, is his second point - that we simply don\u27t get the means test - and so we begin our response by addressing this contention. We then discuss our methodology, which we believe is quite robust, before finally elaborating on why we are sanguine in dismissing his complaints with the two assumptions he claims we make

Response Regarding Bureau Public Reporting Practices of Consumer Complaint Information (Docket No. CFPB-2018-0006)

Response discussing whether the Consumer Federal Protection Bureau should take down its consumer complaint database

Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors

Just three years ago, Congress enacted controversial amendments to the Bankruptcy Code. The proponents claimed that the changes would drive the can pay debtors (of which there were supposedly many) from the bankruptcy courts with tough new income-based eligibility requirements. And indeed, after the enactment of the amendments, the number of people filing for bankruptcy plunged. In this Article - the initial report of the 2007 Consumer Bankruptcy Project - the authors analyze the first national, random sample of post-amendments bankruptcy filers. Contrary to the advocates\u27 claim that high-income filers would be driven from the system and, by implication, that those remaining would have more modest incomes, the data show no change in the income levels of bankruptcy filers after the amendments. These findings thus cast doubt on the suggestion that those purged from the bankruptcy courts - approximately 800,000 in 2007 alone based on trend extrapolation - were high-income deadbeats; they instead appear to have been ordinary American families in serious financial distress. The data also show that debtors filing for bankruptcy in 2007 have even greater debt loads than their counterparts from 2001, a development that seems to track a national trend of increasing consumer debt. The findings thus align with at least two predictions of some legal scholars. The first is that the bankruptcy reform bill was not aimed at high-income abusers but was instead a general assault on all debtors, regardless of their financial circumstances. The second is that debtors are waiting longer - and incurring more debt - before ultimately seeking bankruptcy relief, consistent with the so-called sweat box theory of credit card lending

Interpreting Data: A Reply to Professor Pardo

Professor Pardo has published a pointed critique to our Report, raising three major complaints. First, he claims that we make two predicating assumptions in our study that are flawed. Second, he contends that we misunderstand the means test and fail to appreciate with sufficient nuance its operative effect. Third, he maintains that our Report suffers from methodological problems. We can address the two impugned assumptions quickly. The first one - that BAPCPA\u27s means test is the sole causal agent driving 800,000 putative filers from the bankruptcy courts - is not one we make. The second - regarding the income profiles of the missing 800,000 bankruptcy filers - is actually somewhat consistent with predictions Professor Pardo himself makes elsewhere in his critique. The thrust of Professor Pardo\u27s commentary, however, is his second point - that we simply don\u27t get the means test - and so we begin our response by addressing this contention. We then discuss our methodology, which we believe is quite robust, before finally elaborating on why we are sanguine in dismissing his complaints with the two assumptions he claims we make