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 income-poor 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