A study found that the bankruptcy code is an incredibly effective social insurance policy.
According to their findings, getting approved for Chapter 13 bankruptcy protection "increases annual earnings by $5,562, decreases five-year mortality by 1.2 percentage points, and decreases five-year foreclosure rates by 19.1 percentage points." The study didn't cover Chapter 7 filings, but there should be no reason for those results to be any different.
http://fortune.com/2014/09/30/bankruptcy-law-inequality-income
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