Is the New Bankruptcy Legistlation an Incentive?
Todd Zywicki writing in the Volokh Conspiracy today poses the question:Do Consumers Respond to Bankruptcy Law Incentives? and then proceeds to answer it…..
Now answers.com defines incentives as "something, such as the expectation of a reward or the fear of punishment that indiuces or motivates behavior."
Zywicki, I believe, is applying incentive in the context of expectation of reward. He supports the bankruptcy legislation presumably believing that the majority of those filing for bankruptcy willfully and joyfully acquired their debt spurred on by the incentive of the bankruptcy code. The reward is the total elimination of the debt with few requirements and few repercussions
There has been over a 60% increase in bankruptcy filings since the new legislation was enacted which, in a nutshell, doesn’t allow for the discharge of debt, has lots of requirements and has many repercussions. Zywicki attributes this phenomena to a consumer response to bankruptcy law incentives. The old bankruptcy laws provided an incentive to file for bankruptcy.
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