Bankruptcies Drop Across The Country For The First... - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Bankruptcies Drop Across The Country For The First Time In Five Years

Bankruptcies Drop Across The Country For The First Time In Five Years

Bankruptcies Drop Across The Country For The First Time In Five Years
The content is accurate at the time of publication and is subject to change.

While the American economy has not yet fully recovered from the Great Recession, according to recently-released data the amount of personal bankruptcies filed in 2011 dropped for the very first time in four years. This is ultimately a good sign for how consumers are handling their credit cards debt.

Michael Dean, the managing director of asset-backed securities for Fitch Ratings Inc., claims that 20% to 30% of all credit card charge-offs are generally driven by bankruptcy filings, as reported by online news source Collections & Credit Risk.

This means that when bankruptcies are occurring at a heightened rate due to unfavorable economic circumstances, credit card issuing companies tend to suffer much higher losses as a result. The vast majority of charge-offs occur when consumers do not make payments towards their credit card debt for six months in a row, which leads their lenders to have to write off those accounts as losses.

Last year`s decline in bankruptcies can be credited to country-wide economic conditions that are “marginally” better combined with decreased consumer spending. In fact, consumers across America have reeled in their spending significantly ever since the start of the recession and have been focusing on ridding themselves of debt during the past few years.

The positive trend in bankruptcies does not indicate, however, that all consumers are ready to pull out the wallets and begin spending once again. While there has been a slowing down of job losses causing unemployment numbers to improve and a record-low level of charge-offs, there is, as yet, no core indication of economic growth.

“There are some conflicting signals out there,” said Dean, according to Collections & Credit Risk. “While overall consumer credit health continues to improve, there is not much to base a forecast on. So it is hard to tell what the next year will look like.”

This does not alter the fact that in 2011, credit card issuers enjoyed a respite from charge-offs fueled by bankruptcy filings. Last year the total amount of U.S. bankruptcies dropped 11.9% from the 2010 number. And, according to Lundquist Consulting Inc., a company based in Burlingame, California, that is the first decline seen since 2006.

In the year 2005, bankruptcies exploded across the United States in anticipation of the implementation of a new bankruptcy law that made it more difficult for an individual to declare bankruptcy.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

The New Luxury Card App is Launched
The New Luxury Card App is Launched

Posted: March 18, 2019

Luxury Card has rolled out their new app, giving cardholders access to a variety of features and benefits including, finding one of a kind experiences and chat in real time with Luxury Card Concierge Specialists. These specialists can help… Continue reading

Credit Card Debt At its Highest Level
Credit Card Debt At its Highest Level

Posted: March 15, 2019

U.S. credit card debt has surpassed all previous years hitting a whopping $870 billion in December of last year. This upswing, which brought the level of consumer debt to its highest point to date, occurred when credit card balances went… Continue reading

Citi Prestige Credit Card Adds Cellphone Protection
Citi Prestige Credit Card Adds Cellphone Protection

Posted: March 14, 2019

Breaking or losing your smartphone can get expensive, but so can paying for insurance to cover it. This is something Citi knows well so they are adding cellphone protection to the Citi Prestige® credit card package starting May… Continue reading

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles. That's $600 towards travel!
For Excellent, Good Credit
Earn unlimited 1.5% cash back on every purchase, every day
For Average, Fair, Limited Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!