Consumer bankruptcy filings rose 40% in 2007 as housing-market turmoil and increasing consumer debt levels led more people to seek protection from creditors.
The American Bankruptcy Institute, using National Bankruptcy Research Center data, said total consumer filings rose to 801,840 in 2007 from 573,203 in 2006.
ABI Executive Director Samuel J. Gerdano said the situation is likely to worsen in 2008. "The roughly 40% spike in consumer bankruptcies during 2007 presages even higher filings this year, as the heavy consumer debt load is made worse by the home mortgage crisis," Mr. Gerdano said.
Just another sign of a general economic downturn.
2 comments:
We've hit a very similar situation in the UK - lots of bankruptcies and reposessions being predicted for 2008.
By the end of fall '07, we were already hearing people asking if the mortgage crisis had peaked. Those were stupid people, but still. The real slump is going to occur in '08 as the jobs market finally feels the impact of this recession that seems to be coming on so slowly. We've got a convergence of three crises coming on: people are still just starting to be affected by their adjustable rate mortgages, credit debt has finally caught up to people's ability to pay it off and will perhaps soon surpass it, and the jobs market is weakening. And there is the steadily rising cost of energy and inflation coupled with a lack of real wage gains. We are in a bad way.
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