Consumer Payment Card News

Bankruptcy Trends

Total bankruptcy filings increased by 28% in the third quarter compared to the year ago period, and rose 4% since mid-year. During the three months ending September 30th, total filings hit 218,909 compared to 210,449 for the second quarter and 171,146 one-year ago. However, according to the Administrative Office of the U.S. Courts filings have dropped 29% during the 12-month period ending September 30, 2007, compared to a total of 1,112,542 bankruptcy cases filed for the previous 12-month period. The decline was a direct result of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” The reform has also significantly reduced “Chapter 7” filings. In the 12-month period ending September 30th, “Chapter 7” filings declined 42% while “Chapter 13” filings rose 14%. Historically bankruptcy filings in the third quarter are lower than the second quarter or only slightly elevated.

1Q/06: 116,771
2Q/06: 155,833
3Q/06: 171,146
4Q/06: 177,599
1Q/07: 193,461
2Q/07: 210,449
3Q/07: 218,909
Source: Administrative Office of the U.S. Courts

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