  Does the ability to protect an asset from unsecured creditors affect its
price? This paper identifies the impact of bankruptcy protection on house
prices using 139 changes in homestead exemptions. Large increases in the
homestead exemption raised house prices 3% before 2005. Smaller exemption
increases, to adjust for inflation, did not affect house prices. The effect
disappeared after BAPCPA, a 2005 federal law designed to prevent bankruptcy
abuse. The effect was bigger in inelastic locations.
