Bankruptcy Filing Rates after a Major Hurricane

Twelve to thirty-six months after a major hurricane, bankruptcy filing rates appear to increase for affected areas. The Article draws that conclusion by examining all eighteen hurricanes that hit the fifty United States between 1980 and 2004 and that caused $1 billion or more in damages. Despite substantial limitations in the data that would obscure all but the strongest relationships, distinct patterns emerge. Although further empirical analyses should be done, these findings suggest that Congress should except victims of hurricanes and other natural disasters from recent legislation that will make it more difficult to get bankruptcy relief. Because higher bankruptcy filing rates can be a seen as a symptom of financial distress, this Article also suggests other ideas for legislative relief, including both temporary moratoria on debt collections and adverse credit reporting and more permanent relief such as mandatory debtor-creditor mediation before a creditor could get a court judgment against hurricane victims.