Individual Bankruptcy: Preliminary Findings of a Socio-Legal Analysis

This article presents preliminary findings from an

empirical study of individuals who filed for bankruptcy

in the Toronto bankruptcy district in 1994. The central

findings are that bankrupts are both asset- and incomepoor

at the time of declaring bankruptcy, and have

much higher ratios of debt-to-income than the general

population. Bankrupts are not drawn solely from low

status occupations, but neither are they drawn

significantly from the highest status occupations. The

major reasons for declaring bankruptcy are adverse

employment changes and business failure. There has

been a large rise in the number of women declaring

bankruptcy since earlier studies in the 1970s. The

author concludes that bankruptcy seemed to be

providing a safety net against entrepreneurial risk and

adverse employment changes. Further areas of

investigation identified by the author include the role of

the trustee in bankruptcy in the bankruptcy process,

and the relationship between empirical studies of

bankruptcy and socio-legal analysis of the use of the

legal system by different groups.