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This paper studies the role of job displacement in the household bankruptcy decision. Using an event-study methodology, I find that households in the NLSY are over three times more likely to file for bankruptcy in the year immediately following a job loss. Heightened bankruptcy risk then declines in magnitude but persists for two to three years. These findings are conditional on the financial benefit to filing and consistent with a dynamic forward-looking model where persistent negative incomedoi:10.1162/rest_a_00709 fatcat:pihzytw4uff7ln66ik2d5c7h2i