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Life after Default: Credit Hardship and its Effects

Author

Listed:
  • Giacomo De Giorgi
  • Costanza Naguib
Abstract
We analyze the impact of credit default on individual trajectories. Using a proprietary dataset for the years 2004-2020, we find that after default individuals relocate to cheaper areas. Importantly, default has long-lasting negative effects on income, credit score, total credit limit, and home-ownership status.

Suggested Citation

  • Giacomo De Giorgi & Costanza Naguib, 2022. "Life after Default: Credit Hardship and its Effects," Diskussionsschriften dp2206, Universitaet Bern, Departement Volkswirtschaft.
    • Handle: RePEc:ube:dpvwib:dp2206
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    References listed on IDEAS

    as
    1. Janet Currie & Erdal Tekin, 2015. "Is There a Link between Foreclosure and Health?," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 63-94, February.
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    5. Diamond, Rebecca & Guren, Adam & Tan, Rose, 2020. "The Effect of Foreclosures on Homeowners, Tenants, and Landlords," Research Papers 3877, Stanford University, Graduate School of Business.
    6. Albanesi, Stefania & Nosal, Jaromir, 2015. "Insolvency After the 2005 Bankruptcy Reform," Economics Series 312, Institute for Advanced Studies.
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    8. Mnasri, Ayman, 2018. "Downpayment, mobility and default: A welfare analysis," Journal of Macroeconomics, Elsevier, vol. 55(C), pages 235-252.
    9. Peter Ganong & Pascal J. Noel, 2020. "Why Do Borrowers Default on Mortgages?," NBER Working Papers 27585, National Bureau of Economic Research, Inc.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    mobility; bankruptcy; default; credit; income;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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