Bankruptcy lawyers and credit recovery

I study how bankruptcy law firm advertisements affect household credit, exploiting the borders of local TV advertisement media markets. I document a significant advertising effect on filing rates and subsequently show that ad exposure is associated with better financial outcomes. I then characterize how ad-induced filers are different from existing filers in terms of case, financial, and credit variables. I find that ad-induced filers are more likely to receive a discharge, file with lawyer representation, and be first-time filers. I interpret these findings as evidence that bankruptcy law firm advertisements help mitigate frictions in the bankruptcy decision.

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Publication Details

Journal
Journal of Financial Economics
Published
2026-09-24
DOI
https://doi.org/10.1016/j.jfineco.2026.104380
Primary Topic
Corporate Insolvency and Governance
Type
article
Field-Weighted Citation Impact
0.00
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article

Bankruptcy lawyers and credit recovery

Brian Jonghwan Lee
Journal of Financial Economics
Corporate Insolvency and Governance
article

Bankruptcy lawyers and credit recovery

Brian Jonghwan Lee
article en

Abstract

I study how bankruptcy law firm advertisements affect household credit, exploiting the borders of local TV advertisement media markets. I document a significant advertising effect on filing rates and subsequently show that ad exposure is associated with better financial outcomes. I then characterize how ad-induced filers are different from existing filers in terms of case, financial, and credit variables. I find that ad-induced filers are more likely to receive a discharge, file with lawyer representation, and be first-time filers. I interpret these findings as evidence that bankruptcy law firm advertisements help mitigate frictions in the bankruptcy decision.

Journal of Financial EconomicsVol. 185
Emory University (US), Federal Reserve Bank of Philadelphia (US)
Peace, Justice and strong institutions
Openalex Percentile: Top 4%
Corporate Insolvency and Governance
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