Consumer Bankruptcy Audits

Assistant Professor Fabian Nagel of the Stanford University Graduate School of Business presented his research, "Consumer Bankruptcy Audits."

The findings offer a window into one of the most consequential financial situations a person can face. Nearly one million individuals file for bankruptcy in the United States each year. Among those filers, misstatements of income and assets are common, around 20 to 30% of cases. Importantly, the research distinguishes between two very different types of misstatements: strategic ones, where filers misreport with clear incentives to do so, and confused ones, where filers appear to misunderstand the process they are navigating.