Bankruptcy Rates Fall for Second Year
|January 3, 2008|
Washington, D.C. – For the second year in a row since the passage of the Bankruptcy Abuse Prevention Consumer Protection Act of 2005, consumer bankruptcy filing rates had fallen dramatically in 2007.
Prior to the reform in 2005, the American economy had to absorb bankruptcy filing rates of about 1.5 million per year, imposing a heavy cost to the economy. In 2006, total consumer bankruptcy filing rates dropped to 570,000, the lowest rate since 1986.
"In its second year, bankruptcy reform continues to work for all Americans,” said Steve Bartlett, President and CEO of The Financial Services Roundtable. “Those who can pay back some of their debt should, and those that cannot still have the ability to file for bankruptcy to get the help they need. The new bankruptcy system is working. Congress should be proud of its achievement and reject any proposal to make an easy choice."
In 2007, total consumer bankruptcy filings are projected to be around 750,000, which is almost one-half of the number of filings that would have occurred if the reform had not passed into law. The dramatic decrease in filings shows the new law is working and providing positive benefits to the economy. Current efforts in Congress to reverse the 2005 law would adversely affect the economy.
Source: The Financial Services Roundtable