This article tries to interpret and evaluate the bankruptcy reform now taking place in the U.S. since 1990's. Partly because the U.S. bankruptcy law provided pro-debtor, reorganization-enhancing institutions, 1980's and 1990's saw the increasing filing rate of personal and corporate bankruptcy. Motivated by this fact, bills trying to change the existing bankruptcy law were repeatedly sent to the congress. At first time in 2001, the major reform became feasible and Bills of Bankruptcy Abuse Prevention and Consumer Protection Act of 2003 passed the House. The point of the bill is to make it harder for the individuals to file bankruptcy and to get discharge of their debts. This bill is said to be the success of hard lobbying of credit card companies and bankers. Whether such activities and the new legislation itself are desirable or not is widely discussed.
This article analyses the political process discussed above by using some simple model borrowed from law-and-economics and public choice. Effects of creditor's credit-collecting activities and lobbying activities (trying to make discharge harder) are discussed. It is shown that the combination of some financial innovation (securitization of bad loan) and lobbying activity make some bias toward inefficient liquidation. Some implication for Japanese bankruptcy reform follows.

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