The article explores how different policies on consumer default can impact households and credit markets, especially during economic ups and downs. By using a detailed economic model, the researchers found that eliminating default can increase credit availability but may not always benefit households, especially during a recession. Restricting default to certain times or conditions can have mixed effects, with some policies improving credit markets while others can make credit more expensive and uncertain for households. The study shows that the business cycle plays a crucial role in determining the outcomes of default policies on household welfare and credit access.