Voluntary bankruptcy and long-term credit exclusion: evidence from Chile

This paper examines the link between voluntary personal bankruptcy and subsequent credit access using anonymized administrative data from Chile (2015–2023). Focusing on individuals who filed for bankruptcy in 2018, we measure credit availability before and after bankruptcy using interrupted time series and event study methods. Results show an immediate and persistent 80% drop in credit lines, with financial exclusion lasting at least five years. Despite partial recovery, credit access remains well below pre-bankruptcy levels, highlighting the long-term costs of overindebtedness.