Using an empirical analysis from Chapter 7 cases in five judicial districts, this article estimates the direct costs in typical small business Chapter 7s. The article finds that direct costs are lower than commonly portrayed, constituting a mean of 6.1% of total assets of 13.5% of total distributions. Costs did vary substantially across districts. Delay and case complexity were the largest determinant of bankruptcy costs. Most all of the cases involved only a negligible distribution for unsecured creditors.
|Original language||English (US)|
|Number of pages||28|
|Journal||Washington University Law Quarterly|
|State||Published - 1997|