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lending to debtors; what goes down must come up

As pointed out here, recent studies have empirically shown what bankruptcy attorneys have known anecdotally for years — that debtors can not only obtain credit after filing, but that on average they receive 3 times as many solicitations as non-debtors. Those study concluded that this kind of behavior by banks and financing companies indicates that such creditors

  • are aware of the debtor’s recent bankruptcy — even referring to it in it solicitation material

  • do not believe that debtors are chronic deadbeats — but rather that bankruptcy can be followed by greater financial stability (otherwise why extend additional credit to them?)

  • may have been playing the bankruptcy system themselves when they fought tooth and nail to change the law, only to liberally grant credit to the very people they said were damaging them due to repeated defaults.

  • To my knowledge the credit industry has yet to respond.

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