Forms of Wealth Associated with Attaining Peer Group Net Worth Following Bankruptcy: Postbankruptcy Net Worth

Objectives This study examines the contribution of general human capital, social capital, and financial management practices to the individual's relative financial well†being following bankruptcy. Methods Multivariate logistic regression models were estimated using secondary data from the Survey of Consumer Finances 2004 and 2007. Results Individuals who possess higher general human capital and greater access to social capital are significantly more likely to achieve net worth parity with nonfilers following bankruptcy compared to similar individuals with lower levels of general human capital and social capital. Conclusion Human and social capital are relatively more important factors contributing to attaining net worth parity with peers following bankruptcy than financial management practices and attitudes when controlling for ownership of protected assets. Congressionally mandated financial management training and counseling would likely have substantially better outcomes on bankruptcy filers’ financial well†being over the long term if additional human†capital†building—and consequently income†building—programs are integrated into the mandated financial management training.