Personal Bankruptcies Accelerating
December 1, 2000
Reversing last year's downward trend, the pace of personal bankruptcies has sped up this year -- and there are indications it will increase even more next year.
- Personal bankruptcies -- as measured by a 12-week moving average of filings -- have increased nearly 12 percent since January 2000, hitting 24,288 for the week ending November 4, according to data from Visa.
- Extended over an entire year, that pace would translate into about 1.26 million personal bankruptcy filings -- a bit lower than the 1.28 million filings recorded in 1999.
- SMR Research Corp. estimates that filings will rise as much as 15 percent next year.
- Bankruptcy rates mounted during the 1990s, reaching a peak in 1998 at 1.4 million filings, then declined in 1999.
Experts attribute the current climb to higher interest rates and the slowing economy.
If the climb continues, it may put pressure on Congress to tighten the nation's Bankruptcy Code. Legislation making it more difficult for Americans to be forgiven their debts passed the House this year, but got tangled up in the Senate.
Supporters have promised to try again next year.
Source: Yochi J. Dreazen, "Bankruptcy Pace for Individuals Is Accelerating," Wall Street Journal, December 1, 2000.
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