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Full-Text Articles in Law
"Pennies On The Dollar": Reallocating Risk And Deficiency Judgment Liability, Kristen Barnes
"Pennies On The Dollar": Reallocating Risk And Deficiency Judgment Liability, Kristen Barnes
Akron Law Faculty Publications
Many homeowners are unaware that they face the prospect of crushing personal financial liability if they default on their mortgage loans. While owners may appreciate that they can lose their homes to the lender if they fail to make payments in accordance with their loan terms, many do not fully comprehend that the exposure they have under such circumstances does not end with relinquishing the financed property. In what are known as recourse states, if the lender forecloses and the foreclosure sale does not yield an amount sufficient to cover the borrower’s outstanding debt balance, the lender may file for …
“Robbing Peter To Pay Paul”: Economic And Cultural Explanations For How Lower-Income Families Manage Debt, Laura M. Tach, Sara Sternberg Greene
“Robbing Peter To Pay Paul”: Economic And Cultural Explanations For How Lower-Income Families Manage Debt, Laura M. Tach, Sara Sternberg Greene
Faculty Scholarship
This article builds upon classic economic perspectives of financial behavior by applying the narrative identity perspective of cultural sociology to explain how lower-income families respond to indebtedness. Drawing on in-depth qualitative interviews with 194 lower-income household heads, we show that debt management strategies are influenced by a desire to promote a financially responsible, self-sufficient social identity. Families are reluctant to ask for assistance when faced with economic hardship because it undermines this identity. Because the need to pay on debts is less acute than the need to pay for regular monthly expenses like rent or groceries, debts receive a lower …
Performance-Sensitive Debt: From Asset-Based Loans To Startup Financing, Houman B. Shadab
Performance-Sensitive Debt: From Asset-Based Loans To Startup Financing, Houman B. Shadab
Articles & Chapters
This Article develops a unique theory of performance-sensitive debt and argues that certain revenue-stage startups may be missing out on an important source of capital from asset-based loans. Debt contracts are performance sensitive to the extent any of the borrower’s obligations adjust in response to the performance of the borrower. The three main types of performance sensitivity I identify are (1) a loan’s interest rate adjusting based on the performance of the borrower; (2) the amount of available credit adjusting based on the value of collateral; and (3) renegotiation following breach of a loan covenant. Conceptualizing performance sensitivity as a …