Consumer Bankruptcy A Brief Analysis There have been many theories to explain why the personal bankruptcy rate has been on the rise since The Stigma of Bankruptcy has Lessened This theory suggests that because of wider knowledge of the use of bankruptcy legislation amongst the general population and by specialists such as Legal Aid Community Counselors Credit Counselors and the legal profession that more people decide to utilize bankruptcy for debt relief The Rate of Consumer Bankruptcy is a Function of the Unemployment Rate This theory ties a rise in unemployment to an increase in the number of bankruptcies The Rate of Consumer Bankruptcy is a Function of Outstanding Consumer Credit The people who postulate this theory fall into two sub categories Persons who look upon personal bankruptcy as a cost of doing business or a bad debt experience Persons who might suggest that credit grantors are authors of their own misfortune for making credit too easy The relatively easy access to credit is not a bad thing After all this is one of the most powerful factors that accounts for the strength of our economy In a modern consumer society such as ours with quite easy access to

The Internet home of Is business bankruptcy rampant? Newspaper Study finds rates are up to nine times higher than what federal government claims June AM EDT NEW YORK A recent study says business bankruptcy rates are up to nine times higher than the government claims and also asserts that the new bankruptcy law may further hinder entrepreneurship a newspaper said Wednesday Researchers including a Harvard bankruptcy expert said that percent of filings are at least partially business related much higher than the percent rate given by the Administrative Office of the U S Courts USA Today reported The AOC had not seen the study and declined comment a spokesman told the newspaper Rumors of the death of business bankruptcies have been greatly exaggerated the newspaper quoted the study entitled The Myth of the Disappearing Business The study says the new law doesn't reflect the true impact of small business failures citing the rising use of software that changed the way attorneys complete AOC forms USA Today said The widely used software automatically assumes that debtors including self employed workers are consumers unless otherwise indicated the report said The report comes two months after President George W Bush signed a

Discontinued Publications Bank Trends March March Number Diane Ellis The Effect of Consumer Interest Rate Deregulation on Credit Card Volumes Charge Offs and the Personal Bankruptcy Rate The rising level of credit card debt is often cited as one of the factors in the rising U S personal bankruptcy rate Numerous theories have been advanced to explain the increases including aggressive marketing by credit card issuers and a lack of discipline on the part of consumers This paper argues that a Supreme Court decision fundamentally altered the market for credit card loans in a way that significantly expanded the availability of credit and increased the average risk profile of borrowers Marquette ushered in deregulation of usury ceilings on consumer interest rates by allowing lenders in a state with liberal usury ceilings to export those rates to consumers residing in states with more restrictive usury ceilings The result was a substantial expansion in credit card availability a reduction in average credit quality and a secular increase in personal bankruptcies The Canadian experience with bankruptcies supports this argument This paper contends that a tightly regulated world marked by restricted access to consumer credit and a low level of personal bankruptcies was

Accessibility Links bbc co uk Navigation RELATED BBC SITES Last Updated Wednesday August GMT UK Bankruptcy rate forecast to rise Bankruptcy will be a headache for even more people The number of people going bankrupt is expected to rise sharply in the next three years according to a government report on personal debt The Department of Trade and Industry says the number of bankruptcies may nearly double to reach a quarter by March And it warns that the problem could get much worse if there was a recession A record people in England and Wales became insolvent in the second quarter of recent figures showed However the government has denied that recent changes to the law have encouraged more people to declare themselves insolvent It says that despite media reports and anecdotal evidence most prospective bankrupts are not aware that the Enterprise Act of has made it possible to exit bankruptcy after just one year rather than three Getting worse The DTI report points out that the number of people with too much debt is small but continuing to grow Many people could be tipped into financial difficulties by a small change in their circumstances DTI report It highlights

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