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Life in the Sweatbox

(reprinted from Credit Slips)

Pamela Foohey, Indiana University Maurer School of Law
Robert M. Lawless, University of Illinois College of Law
Katherine M. Porter,  University of California – Irvine School of Law
Deborah Thorne,  University of Idaho

Date Written: February 20, 2018  94 Notre Dame Law Review __ (forthcoming 2018)

Abstract

The time before a person files bankruptcy is sometimes called the financial “sweatbox.” Using original data from the Consumer Bankruptcy Project, we find that people are living longer in the sweatbox before filing bankruptcy than they have in the past. We also describe the depletion of wealth and well-being that defines people’s time in the sweatbox. For those people who struggle for more than two years before filing bankruptcy—the “long strugglers”—their time in the sweatbox is particularly damaging.

During their years in the sweatbox, long strugglers deal with persistent collection calls, go without healthcare, food, and utilities, lose homes and other property, and yet remain ashamed of needing to file.

Strugglers: those who need help, but afraid to ask

For these people in particular, though time in the sweatbox undermines their ability to realize bankruptcy’s “fresh start,” they do not file until long after the benefits outweigh the costs. This Article’s findings challenge longstanding narratives about who files bankruptcy and why. These narratives underlie our laws, influence how judges rule in individual cases, and affect how attorneys interact with their clients.

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Diane L. Drain

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