JOURNAL OF LEGAL, ETHICAL AND REGULATORY ISSUES

[Pages:146]Volume 14, Number 2

Printed ISSN: 1544-0036 PDF ISSN: 1544-0044

JOURNAL OF LEGAL, ETHICAL AND REGULATORY ISSUES

John Yeargain, Co-Editor Southeastern Louisiana University

Evelyn Hume, Co-Editor Friends University

The Journal of Legal, Ethical and Regulatory Issues is owned and published by the DreamCatchers Group, LLC. Editorial content is under the control of the Allied Academies, Inc., a non-profit association of scholars, whose purpose is to support and encourage research and the sharing and exchange of ideas and insights throughout the world.

Page ii

Authors execute a publication permission agreement and assume all liabilities. Neither the DreamCatchers Group nor Allied Academies is responsible for the content of the individual manuscripts. Any omissions or errors are the sole responsibility of the authors. The Editorial Board is responsible for the selection of manuscripts for publication from among those submitted for consideration. The Publishers accept final manuscripts in digital form and make adjustments solely for the purposes of pagination and organization.

The Journal of Legal, Ethical and Regulatory Issues is owned and published by the DreamCatchers Group, LLC, PO Box 1708, Arden, NC 28704, USA. Those interested in communicating with the Journal, should contact the Executive Director of the Allied Academies at info@.

Copyright 2011 by the DreamCatchers Group, LLC, Arden NC, USA

Journal of Legal, Ethical and Regulatory Issues, Volume 14, Number 2, 2011

Page iii

EDITORIAL REVIEW BOARD

David Arnesen Seattle University

Eugene Calvasina Southern University & A & M College

Debbie DuFrene Stephen F. Austin State University

Theresa Hrncir Southeastern Oklahoma State

Douglas L Luke University of Texas at Dallas

Treba Marsh Stephen F. Austin State University

Sandra McKay Southeastern Louisiana University

D.J. Parker University of Washington - Tacoma

Daniel L Reynolds Middle Tennessee State University

Thomas R. Tudor University of Arkansas at Little Rock

Robert L. Webster Ouachita Baptist University

Raymond Zimmermann The University of Texas at El Paso

Stephanie Huneycutt Bardwell Christopher Newport University

Robert Cope Southeastern Louisiana University

J. Keaton Grubbs Stephen F. Austin State University

Taylor Klett Sam Houston State University

Marty Ludlum Oklahoma City Community College

Roselie McDevitt Fairfield University

Simon K. Medcalfe Augusta State University

Bruce D. Phillips NFIB Research Foundation

Pamela P. Stokes Texas A&M University - Corpus Christi

Suzanne Pinac Ward University of Louisiana at Lafayette

Brian Winrow Winona State University

Journal of Legal, Ethical and Regulatory Issues, Volume 14, Number 2, 2011

Page iv

TABLE OF CONTENTS

LETTER FROM THE EDITORS................................................................................................. VI

FORGIVE US OUR DEBTS: THE GREAT RECESSION OF 2008-09 ....................................................................................... 1

Thomas N. Edmonds, Western Michigan University Leo J. Stevenson, Western Michigan University Judith Swisher, Western Michigan University

SHOULD THE NONPROFIT ORGANIZATION'S MISSION DRIVE THE TAX DEDUCTIBILITY OF CONTRIBUTIONS?............................................................................... 17

Raymond J Elson, Valdosta State University Leonard Weld, Valdosta State University

EDUCATION POLICY AND SCHOOL SEGREGATION: A STUDY OF THE DENVER METROPOLITAN REGION ..................................................... 27

David Aske, University of Northern Colorado Rhonda R. Corman, University of Northern Colorado Christine Marston, University of Northern Colorado

OMAHA UNILATERALLY CHANGES RETIREE'S BENEFITS ? CONTRACT CLAUSE IMPLICATIONS ................................................................................... 37

Steven C. Palmer, Northwestern Oklahoma State University George McNary, Creighton University Lee E. Weyant, Kutztown University

RISING RISKS AND UNCERTAINTIES FOR U.S. FIRMS' GIFTS, TRAVEL AND ENTERTAINMENT EXPENSES FOR MARKETING IN FOREIGN COUNTRIES: THE IMPLICATIONS OF INCREASED FOREIGN CORRUPT PRACTICES ACT ENFORCEMENT ...................................................................... 73

Karl A. Boedecker, University of San Francisco

Journal of Legal, Ethical and Regulatory Issues, Volume 14, Number 2, 2011

Page v

ACTIVE VERSUS PASSIVE ACADEMIC DISHONESTY: COMPARATIVE PERCEPTIONS OF ACCOUNTING VERSUS NON-ACCOUNTING MAJORS .................... 89

Robert Elmore, Tennessee Tech University M. Meral Anitsal, Tennessee Tech University Ismet Anitsal, Tennessee Tech University SHE'S NOT HEAVY, SHE'S MY SISTER: DOES ANYONE REALLY GIVE A HOOT ABOUT OBESITY AND WEIGHT DISCRIMINATION? THE CASE OF THE "HEAVY" HOOTERS GIRLS ................................................................ 105 Linda L. Barkacs, University of San Diego Craig B. Barkacs, University of San Diego WHEN A LIE IS THE TRUTH: PANDERING CHILD PORNOGRPAHY ........................... 117 Debra D. Burke, Western Carolina University Janet Ford, Western Carolina University

Journal of Legal, Ethical and Regulatory Issues, Volume 14, Number 2, 2011

Page vi

LETTER FROM THE EDITORS

Welcome to the Journal of Legal, Ethical and Regulatory Issues. The Journal is owned and published by the DreamCatchers Group, LLC. The Editorial Board and the Editors are appointed by the Allied Academies, Inc., a non profit association of scholars whose purpose is to encourage and support the advancement and exchange of knowledge, understanding and teaching throughout the world. The JLERI is a principal vehicle for achieving the objectives of the organization. The editorial mission of this journal is to publish empirical and theoretical manuscripts which advance understanding of business law, ethics and the regulatory environment of business.

Readers should note that our mission goes beyond studies involving business law or the effect of legislation on businesses and organizations. We are also interested in articles involving ethics. In addition, we invite articles exploring the regulatory environment in which we all exist. These include manuscripts exploring accounting regulations, governmental regulations, international trade regulations, etc., and their effect on businesses and organizations. Of course, we continue to be interested in articles exploring issues in business law.

The articles contained in this volume have been double blind refereed. The acceptance rate, 25%, conforms to the Allied Academies' editorial policy.

Please visit the Allied Academies' web page to learn how to submit manuscripts for review as well as to view details of forthcoming conferences. We invite your comments and suggestions at any time. Please send these to info@.

John Yeargain Southeastern Louisiana University

Evelyn Hume Friends University

Journal of Legal, Ethical and Regulatory Issues, Volume 14, Number 2, 2011

Page 1

FORGIVE US OUR DEBTS: THE GREAT RECESSION OF 2008-09

Thomas N. Edmonds, Western Michigan University Leo J. Stevenson, Western Michigan University Judith Swisher, Western Michigan University

ABSTRACT

This research analyzes bankruptcies, mortgages past due and foreclosures from 1999 ? 2009 and finds that bankruptcy filings, mortgages past due, and foreclosures are all positively related to the unemployment rate and negatively related to the change in housing values. Results show that borrowers seek bankruptcy protection at greater rates in states with stronger lender garnishment laws and that states with shorter foreclosure timelines see higher rates of bankruptcy filings. Evidence also suggests that some borrowers engage in strategic default. After controlling for other variables, bankruptcy rates are lower in states in which a strong incentive to default strategically exists.

Key Words: bankruptcy, unemployment, mortgage foreclosure, mortgage default, strategic default.

INTRODUCTION

The Great Recession of 2008-09 has taken a toll on American households. The economic turmoil, which included a loss in investment and retirement wealth, falling housing values, and widespread job loss, has led to an increase in personal bankruptcy filings. The New York Times reported that in March 2010 there were 158,000 personal bankruptcy filings, the largest monthly number since the Bankruptcy Abuse and Consumer Protection Act of 2005 took effect on October 20, 2005 (Wilson, 2010). In addition, mortgage delinquencies and foreclosures have reached new highs according to the Mortgage Bankers Association (Kemp, 2010). Strategic defaults, in which underwater homeowners who can afford to make their mortgage payments default by choice, have generated heated debate in both the popular press and in academia (see, for example, Lowenstein, 2010; Haggerty and Timiraos, 2009; White, 2010).

The increasingly common failure of consumers to fulfill financial contracts is an indication of the difficult financial situations in which they find themselves. Widespread mortgage defaults put downward pressure on housing values, further exacerbating the problem and creating a downward spiral. The ramifications of widespread default and bankruptcy for our financial system are serious at another level as well. Lenders are facing losses, leading to lower

Journal of Legal, Ethical and Regulatory Issues, Volume 14, Number 2, 2011

Page 2

stock prices for financial institutions. Loans that were securitized are generating losses for pension funds and other investors. The resulting weak consumer confidence leads to lower consumer spending and concern about a possible double dip recession (Mackenzie, 2010). Thus both the social and the economic implications of widespread bankruptcy and default are important. Our research examines bankruptcies and foreclosures in light of the economic stress associated with the Great Recession of 2008-09. Our analysis also sheds some light on strategic default.

US CONSUMER BANKRUPTCY Historically, US law has taken the perspective that bankruptcy provides a fresh start to a debtor who, because of bad luck or unfortunate circumstances, is unable to meet his financial obligations. The US Bankruptcy Code allows for two main forms of consumer bankruptcy, Chapter 7 and Chapter 13. Under Chapter 7, most prior debts can be discharged without a commitment to repay from future earnings, provided the debtor relinquishes all non-exempt assets. Chapter 13 requires a filer to repay a portion of his debts over a set period (generally five years) in exchange for retaining non-exempt assets. Under Chapter 7, filers can choose either federal or state law to determine the allowable homestead exemption. The federal exemption is $15,000, but state exemptions vary greatly from zero to the unlimited exemptions of Florida and Texas.

Figure 1.

Source: US Courts Bankruptcy Statistics

Journal of Legal, Ethical and Regulatory Issues, Volume 14, Number 2, 2011

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download