The Dallas Morning News reports: "The economy's deep troubles are pushing a growing number of struggling consumers into bankruptcy. Often they have much more debt than those who filed in previous downturns."
"Dropping home values, shrinking incomes and the near disappearance of credit have proved a strong mixture. While all the usual reasons that borrowers seek bankruptcy – job loss, medical bills, divorce – play significant roles, new forces are changing who can ride out the tough times and who cannot."
"The number of personal bankruptcy filings jumped nearly 8 percent in October from September, after moving steadily upward for the last two years, said Mike Bickford, president of Automated Access to Court Electronic Records, a bankruptcy data and management company."
"Filings totaled 108,595, surpassing 100,000 for the first time since a law that made it more difficult to file for bankruptcy took effect in 2005. That's an average of 4,936 bankruptcies filed each business day last month, up nearly 34 percent from October 2007."
Monday, November 17, 2008
Paulson Credit-Card Bailout Draws Growing Criticism
Time Magazine reports on plans to bailout credit card issuers: "Treasury Secretary Henry Paulson's latest plan for the $700 billion bailout fund has many economists responding like Seinfeld's Soup Nazi, "Next!" They say the idea of using funds approved by Congress in early October to stimulate credit card and auto lending is ill advised and unnecessary."
"'I don't think providing more leverage to consumers is best for our economy in the long-term,' says Adam Lerrick, who is a visiting scholar the conservative-leaning Washington-based think tank American Enterprise Institute. 'The consensus is that consumers have borrowed too much over the past 10 years, so I don't get why putting them further into debt is the answer.'"
"What's more, industry watchers say credit card and auto lending has actually held up quite well despite the credit crunch. According to market research firm Synovate, the average consumer probably has a higher limit and therefore can spend more on their credit card than they could a year ago. "
"'I don't think providing more leverage to consumers is best for our economy in the long-term,' says Adam Lerrick, who is a visiting scholar the conservative-leaning Washington-based think tank American Enterprise Institute. 'The consensus is that consumers have borrowed too much over the past 10 years, so I don't get why putting them further into debt is the answer.'"
"What's more, industry watchers say credit card and auto lending has actually held up quite well despite the credit crunch. According to market research firm Synovate, the average consumer probably has a higher limit and therefore can spend more on their credit card than they could a year ago. "
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