The disadvantaged in bankruptcy

This article sheds light on the plight of people who are at the tail end of society: they not only are financially insolvent, but also members of the traditionally disadvantaged segments of society. It summarizes the findings of an empirical study of bankrupt individuals who are members of the traditionally underprivileged groups in Israeli society. It finds that some of the disenfranchised groups in Israeli society are overrepresented in Israeli bankruptcy plausibly as a product of their inherently fragile financial condition in society at large. In contrast, other traditionally disenfranchised groups in Israeli society are underrepresented in bankruptcy possibly partly due to limited access to credit However, the overriding explanation for the overrepresehtation of some subordinate groups and the underrepersentation of others in bankruptcy may be due to the propensity among particular group members to become entrepreneurs. As anticipated, petitioners belonging to the weaker groups in Israeli society were financially more fragile in terms of earnings and asset holdings compared to bankrupts belonging to the dominant groups. Nonetheless, while the weaker groups had lower earnings and asset holdings, their overall financial condition was not necessarily inferior due to.their substantially lower debt burden.