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Another couple left their job the year before. Even though they quickly found new ones – as a psychiatric assistant in a public hospital and director of a public agency – their income dropped by 25%. They have fallen behind on mortgages and other debts of $ 45,000. Their experience illustrates the critical finding of the study that lenders gave huge credit to people who were clearly at risk.
Although the files do not tell the whole story, they provided enough evidence to Warren and his coauthors to write: "Time and time again, we were surprised by the data and forced to rethink our own understanding of bankruptcy.
The findings of the study, set out in their 1989 paper, also explicitly raise questions about a fundamental principle of law and economics: that individuals respond rationally to economic incentives. Applying for bankruptcy – the more bankruptcy provisions were generous, the greater the number of people to file would be high – this was the reason for the campaign that had succeeded in strengthening the code of bankruptcy. bankruptcy in 1984.
Over the years, the research has improved Warren's status from a little-known Texas professor to a sought-after speaker, a writer, and a bankruptcy consultant. It also paved the way for his political career.
In 1995, Mike Synar, a former Democratic Congressman from his home country, asked Ms. Warren, who was then a Harvard professor, to advise a special commission to review the bankruptcy system. She hesitated, fearing that Washington's job would make her purse unclean, but joined when Synar promised to keep her isolated from politics.
It was during this period, in 1996, that she changed from Republican to Democrat to party membership, although she insisted that her essential conversion was from "non-political" to "political."
"I do not come from a political family," she said. "I was not political as an adult. I was raising a family, teaching at school and doing my research, "she said.
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