Abstract:The primary means of enforcement of legal liabilities is through the seizure of debtors' assets. However, debtors can shield their assets in various ways and thereby reduce the power of enforcement. This paper studies the circumstances under which a debtor would choose to shield assets and the value of assets that would be shielded. A key idea is that borrower's wealth mutes shielding incentives. Intuitively, avoiding debts through shielding requires that enough assets will be shielded, for else the debts can … Show more
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