REPORT: BANKRUPTCY FILINGS REMAIN STEADY

January 17, 2006

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The new bankruptcy law is reportedly doing to little to curb the number of consumers filing for bankruptcy, according to the Washington Post, CNNMoney.com reported today. Money Management International Inc., the nation’s largest credit counseling organization, told the Post that in the first 13 weeks since the law took effect Oct. 17, only 4.5 percent of the 14,907 debtors the company counseled were in a position to qualify to pay back debts over a few years. Other credit counseling agencies likewise said that few qualified for any plan other than bankruptcy. In addition, credit counselors expect bankruptcies to climb steadily in the next few months as consumers are faced with rising energy costs, higher interest rates and the new federally mandated policy that raises the minimum due on credit card bills. Advocates of the bankruptcy law said it’s still too early to determine how successful the new requirements are in curbing bankruptcies, while financial industry officials said debtors will benefit from the financial education given by credit counselors. Read more.