A fresh start? That depends.

• Position: Bankruptcy

People who file bankruptcy eventually recover financially compared to those who never had to file, but it takes 10 to 20 years or more, maintains a study by Lois R. Lupica, professor of law at the University of Maine, Portland. "Bankruptcy is not a lifelong curse, but it doesn't provide an immediate fresh start, either," the study notes. Compared to those who have similar social and economic backgrounds, people who declare bankruptcy catch up to nonfilers in terms of savings in about 12 years, total income in 14 years, home ownership in 14 years, and net worth in 26 years.

However, on some measures, those who go through bankruptcy do as well as, or slightly better than, those who never filed. For example, 90% of those who went bankrupt have a car less than a year after bankruptcy, compared to 89% of individuals who never filed. About 74% of bankruptcy fliers have full-time jobs after one to five years, compared to 73% of non-filers. "Along some dimensions, such as access to a car, bankruptcy doesn't seem to have any negative effect at all but, on most measures, bankruptcy does set people back quite a bit."

In general, the study shows that persons who file for bankruptcy are more likely to be divorced, female, less educated, have lower income, live in urban areas, and have bigger families than...