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The purpose of the paper is to analyze the new Bankruptcy Law in Saudi Arabia (KSA Bankruptcy Law) under both a comparative lens and a policy-oriented one, while highlighting some of the most essential operational steps and procedures in a bankruptcy proceeding under the law.

The approach adopted analyzes the specific mechanics and procedures of a bankruptcy law under the general policies and goals of bankruptcy. Additionally, where appropriate, a brief comparison to the US Bankruptcy code and its provisions is presented to provide an alternative approach on how similar issues are handled under a reputable and proven bankruptcy system.

Overall, the KSA Bankruptcy Law is a major accomplishment and advancement to the Kingdom’s insolvency regime. The law consolidated and codified the laws governing bankruptcy under the Kingdom’s prior regime, and followed the structure of a modern bankruptcy regime. In doing so, several of the law’s policies and objectives have been fulfilled by providing an effective, predictable and reliable bankruptcy system.

Given the relatively recent adoption of the KSA Bankruptcy Law, the paper provides a comprehensive assessment of the law’s operation and its effectiveness in achieving its policy goals as a modern bankruptcy law.

This paper aims to study the effect of the establishment of bankruptcy courts on bond issuance market. This paper helps to predict that the introduction of bankruptcy courts in China can mitigate price distortions caused by the implicit government guarantees and promote the development of the high-risk bond market.

This paper exploits the staggered introduction of bankruptcy courts across cities to implement a differences-in-differences strategy on bond issuance data. Using bonds issued in China between 2018 and 2020, the impact of bankruptcy courts on the bond issuance market can be analyzed.

This paper reveals that bond issuance credit spreads increase and is more sensitive to firm size, profitability and downside risk of issuance entity after the introduction of bankruptcy courts. It also reveals a substantive increase in bond issuance quantity and a decrease in issuer credit ratings following the establishment of bankruptcy courts. In addition, the increase of credit spreads is more prominent for publicly traded bonds, those whose issuers located in provinces with lower judicial confidence, bonds issued by SOEs and bonds with stronger government guarantees. Finally, the role of bankruptcy courts is more pronounced in regions with higher marketization.

This paper relates to previous studies that investigate the impact of laws and institutions on external financing. It helps provide new evidence to this literature on how improvements of efficiency and quality in bankruptcy enforcements relate to the marketization of bond issuance. The results provide further evidence on legal institutions and bond financing.

This paper aims to highlight how an interpretative approach to law as posited by Dworkin may be used to remedy the tension between employment protection and corporate rescue laws.

This paper adopts a doctrinal and theoretical approach to law.

The tension between corporate rescue and employment protection laws affects both employees’ and business owners’ policy objectives on corporate insolvency. The theoretical perspectives of both the traditionalists and proceduralists have so far failed to provide a clear approach on how this tension may be balanced or remedied. This paper proposes that this tension may be remedied through interpretation, that is, by adopting Dworkin’s Interpretative Approach to Law.

Most researchers and academics have written extensively about the tension between corporate rescue and employment protection, but this paper is the first of its kind to propose a remedy to this tension through interpretation.

This paper aims to revisit the Indian experience on corporate bankruptcy law to answer “why Indian corporate insolvency law structured differently from a manager-driven (pre-Insolvency Code) to manager-displacing model (post-Insolvency Code)?”

This paper is qualitative in nature. The paper analyses the prevailing theoretical wisdom in corporate insolvency law in India and examines the practices of Indian bankruptcy regime.

The authors argued, considering the corporate ownership composition, the Insolvency and Bankruptcy Code 2016 will not accomplish the intended objective (i.e. the “creditor primacy”). The findings refute with the evolutionary theory, i.e. debt and equity both will tend towards dispersion in outsider system of governance.

This paper put forward the imprint that Indian corporate insolvency regime is manager-displacing under Law on Books and manager-driven under Law on Practice.

The purpose of this paper is to explore the impact of creditors' undervaluing the total expected cost of a borrower's bankruptcy filing because a portion of the cost will be borne by other lenders. Creditors who bear a smaller portion of the total cost of a personal bankruptcy would be expected to take less care to avoid triggering one.

This paper presents a theoretical model of a creditor's decision of how aggressively to pursue collection. The model shows that because each lender's collection actions increase the probability of bankruptcy, each lender will collect more aggressively when a borrower has many loans. The paper tests the predictions of the model using a large dataset of credit card accounts.

The model highlights an important testable result: holding the level of debt constant, a borrower with many loans is more likely to choose formal bankruptcy and less likely to choose informal bankruptcy, i.e. chronic non-repayment absent a bankruptcy filing. This paper finds evidence that strongly supports the predictions of the model. Laws that limit creditor collection actions do not appear to mitigate the effects of increasing number of loans.

While a few papers have tested whether strategic interactions may impact business bankruptcy, no paper of which the author is aware has provided clear empirical evidence of the existence of common pool effects in the personal credit market. These effects point to an important and potentially underappreciated source of risk for borrowers and creditors in this market.

Although several microeconomic and macroeconomic factors driving banks' credit quality have been well-studied in the literature, one aspect which appears to have received limited attention is bankruptcy reforms. To address this issue, the author exploits data on Middle East and North Africa (MENA) country banks during the period 2010–2020 and examines the impact of bankruptcy laws on their credit quality.

In view of the staggered nature of the implementation of legal reforms across countries, the author utilize a difference-in-differences specification to tease out the causal impact.

The findings reveal that bankruptcy reforms lead to a significant improvement in banks' credit quality. The impact is manifest mainly for conventional banks and driven by an increase in recovery intensity. The author also presents evidence which shows that such reforms exert positive real effects, although this impact differs across country characteristics.

The study is among the early ones for the MENA region to assess the interlinkage between bankruptcy reforms and banks' credit quality.

The demand-side view of creditor rights posits a negative association between creditor rights and corporate borrowings. The purpose of this paper is as follows: first, the author examines whether the demand-side effect is more pronounced amongst firms with excess promoter shareholding. Subsequently, the authors analyze the impact of high promoter holdings on investment decisions owing to bankruptcy reforms.

To answer the above questions, the authors exploit the passage of the Insolvency and Bankruptcy Code (IBC) (2016) that strengthens the creditor rights of lenders, which impacts the borrowings and financing activities of Indian corporates. Using a panel of listed Indian firms over the period of 2012–2019, the authors analyze how the IBC affects firms’ borrowings and financing decisions with excess promoter holdings.

The authors find that bankruptcy reforms led to a statistically significant decline in the use of borrowed funds (primarily secured and long-term debt) by firms with high concentrated holdings. The analysis also indicates that firms with excess promoter ownership face an increased cost of debt due to bankruptcy reforms. As a result, firms with excess promoter holdings curtail their investments. Overall, the results indicate that India’s bankruptcy reforms significantly affect the firms’ financing and investment decisions with highly concentrated ownership.

While past research has explored the relationship between bankruptcy reforms and demand for/supply of debt, the authors provide novel empirical evidence on the role of promoter holdings that affects the relationship between bankruptcy law and financing and investment decisions. To the best of the author’s knowledge, this study is the first to investigate the role of ownership structure in the context of bankruptcy reforms by using a quasi-natural experiment.

The purpose of this paper is to explore the origin of the development of insolvency laws in China and Russia and explores the evolving role of the states in the legislative process.

The study is conducted based on the analysis of historical materials and the relevant secondary sources written in Chinese and Russian.

The paper argues that the development of the insolvency laws in China and Russia underlines the diverging perceptions by the states about the ways to improve economic performance through reforming their respective state enterprise system. On the other hand, the unsatisfactory utilisation of the laws in the these countries revealed the incompleteness of the wider institutional reform that opened up possibilities for predatory exploitations and corruptive practices which in turn upset the market-building in these developing economies.

This study highlights that by bring back the state into the analysis, the competing ideas, interests and institutions in the development of insolvency laws can be identified.

The purpose of this paper is to investigate to what extent the increased insolvency filings by migrants since the enactment of the consumer insolvency law in 1999 is associated with moral hazard. It describes the profile of migrant debtors and highlights the areas of moral hazard. This study aims to propose changes to the consumer bankruptcy system.

Empirical evidence for this work consists of primary data from 435 individuals mainly with immigration background, who were declared bankrupt by district courts (Amtsgericht). Both qualitative and quantitative research types were used. Interviews helped to attain an in-depth understanding of the way in which any misconduct may take place. Quantitative data were gathered to understand the debt profile of migrant debtors, types of liabilities and creditors’ reactions to write-off requests.

The paper provides empirical insights about the way misconduct is pursued and suggests that neither party, i.e. the debtors through debt counsellors and creditors/factoring companies or their representatives, is entirely free of unethical practice. Hence, the paper stresses the need to establish public agencies, which provide joint mediation services for private debtors and their creditors alike.

Data collected for the purpose of this study may not be comprehensive because given the sensitivity of the area of study that is misconduct – including breaking the law – not all machinations may have been revealed and described in this work. Therefore, further research needs to be conducted in this field.

The paper has implications for policymakers. Consumer bankruptcy system is relatively new and needs to be amended to allow debtors and creditors to negotiate write-offs not by sending countless letters through their respective representatives, which is also carried out over a long period of time, but to try to come to terms in one agency, which is responsible for both sides.

The findings in this paper may provide some valuable insights, which could also give impulses to debates on problems that may come with immigration.

To the best of the author’s knowledge, no research exists that analyzes the topic at hand with such extensive data and using both methods of research at the same time.

The purpose of this study is to examine the association between financial capability and informal bankruptcy, especially among families in which the respondent and/or spouse borrowed student loans to fund their own education and families that did not have such loans.

US nationally representative data were employed. Three family types were used, families with student loans borrowed to fund respondent and/or spouse's education and education was completed (type 1 holders) or not completed (type 2 holders), and families that did not borrow student loans for respondent and/or spouse's education (non-holders). Informal bankruptcy was measured by being insolvent and late in debt payment for 60 or more days. Financial capability was measured by both an index and its various components. Multivariate logistic regressions were conducted to examine associations between financial capability and informal bankruptcy.

Generally, financial capability was negatively associated with informal bankruptcy, and student loan holders were more likely to be informally bankrupt than non-holders. However, such negative associations were statistically significant for type 1 holders and non-holders but insignificant for type 2 holders. Two desirable financial behaviors (information search and online banking) reduced the chance of informal bankruptcy for type 2 holders.

First, cross-sectional data cannot establish a causal relationship. Second, findings using data from a single country may not be generalized to other countries.

Financial service professionals should help loan applicants evaluate the necessity of borrowing. Banking professionals can use the findings to develop products to meet different consumer needs. Financial educators should target different groups with different strategies in financial capability education. Policymakers should develop policies helping student loan holders complete education funded by student loans.

This study examines factors related to informal bankruptcy, providing insights to warning signs of bankruptcy. This study explores the potential effect of a new factor, financial capability, on informal bankruptcy, filling in a gap in the bankruptcy literature. This study recognizes differences in informal bankruptcy among various types of families and examines the different effects of financial capabilities on informal bankruptcy for different types of families.