Personal Bankruptcy Law, Fresh Starts, and Judicial Practice

We explore the rationale behind and the mechanisms employed by French judges while discharging personal debts in exchange for liquidation of debtors' assets. Our empirical results highlight the determinants of judicial selection between debtors whose debts are wiped out and those who have to reimburse them. We find that French judges tend to disqualify debtors with multiple creditors from debt discharge, and are sensitive to variables representative of economic activity in the courts' locality. These empirical results help us to understand better how much French personal bankruptcy law is rather pro-creditor than pro-debtor.