Another Triumph of Personal Responsibility: Creditor-Debtor Conflict, Morality, and the Crafting of U.S. Bankruptcy Law

• In Event: 355 - Section on Economic Sociology Roundtable Session (one-hour).
  In Refereed Roundtable: Table 15. Imperfect Information, Market Conflict

Abstract

This paper seeks to address the Congressional debate regarding whether bankruptcy results more from individual irresponsibility or from personal misfortune. Within this debate, creditor advocates generally attribute rising rates of bankruptcy in the U.S. population to its decreasing stigma and stress the importance of personal and financial responsibility in their arguments. Debtor advocates, however, often describe bankrupters as responsible individuals faced with hardship and blame the profit-seeking credit industry for rising bankruptcy rates. The former explanation stems from a very individualist stance, and the latter presents a more social structural viewpoint. Despite these differences, both ideologies rely on conceptions of debt morality to argue either for an individual’s obligation to repay his or her debts or for society’s responsibility to limit usury and offer a second chance. In this paper, I focus on how these perspectives have affected bankruptcy law in the United States. I analyze congressional hearing and bills data from 1947 through 2010 to demonstrate the changing salience of credit markets and bankruptcy for Congress. I also code congressional hearings, testimony, and reports from 1997 through 2005 surrounding the legislation that eventually became the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). By addressing the debate surrounding BAPCPA, I show how ideology permeates congressional debates – often above science and research – and how an ideological framework that resonates with broader views of personal responsibility and morality can affect the passage of certain government reforms.

Author

• Michelle Lee Maroto, University of Alberta