Consumer Payment Card News

Bankruptcy Rises

Bankruptcy filings have declined from about 35,000 per week in 2005 to approximately 10,000 per week this year. However, the number of monthly filings has been slowly increasing this year from 34,411 in January to 43,780 in May. In the first five months of this year a little more than 200,000 filings have been made compared to nearly 700,000 for the same period one-year ago. The 2005 drop-off was due to the full implementation of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” which took effect on October 17th. Bankruptcy filings nose-dived in the first quarter, falling 73% compared to one-year ago and down six-fold sequentially. The number of filings in the first quarter is the lowest number of quarterly filings in the last 20 years. According to CA-based Lundquist Consulting 1Q/06 Chapter 7 consumer filings are 80% lower 1Q/05. According to the Administrative Office of the U.S. Courts, consumer and business bankruptcy filings hit a record 667,431 petitions in the fourth quarter. For monthly figures on bankruptcy filings visit CardData (“www.carddata.com”:http://www.carddata.com).

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