About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 (September 14, 2007)

handle is hein.crs/crsmthabafk0001 and id is 1 raw text is: Order Code RS20777 Updated September 14, 2007 SCRS Report for Congress Consumer Bankruptcy and Household Debt Mark Jickling Government and Finance Division Heather D. Negley and Brent W. Mast Knowledge Services Group Summary The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA, P.L. 109-8) included the most significant amendments to consumer bankruptcy procedures since the 1970s. The 1 10th Congress continues to monitor the impact of the new law on debtors and creditors. Bankruptcy reform was enacted in response to the high number of consumer bankruptcy filings, which in 2005 and 2006 reached five times the level of the early 1980s. Why did filings increase so dramatically during a period that included two of the longest economic expansions in U.S. history? Because bankruptcy is by definition a condition of excessive debt, many would expect to see a corresponding increase in the debt burden of U.S. households over the same period. However, while household debt has indeed grown, debt costs as a percentage of income have risen only moderately. What aggregate statistics do not show is that the debt burden does not fall equally on all families. Financial distress is most common among lower-income households: in 2004, 27% of families in the bottom fifth of the income distribution spent more than 40% of their income to repay debt. This report presents statistics on bankruptcy filings, household debt, and families in financial distress, and it will be updated as new statistics become available. This report presents data on bankruptcy filings, household debt, and families in financial distress. Table 1 shows filings since 1980. Both business and nonbusiness bankruptcies rose in the early 1980s, but business filings peaked in 1987 and have since declined, while the number of consumer filings continued to grow through 2005. In 2005, the number of filings surpassed 2 million there was a rush to the courthouse as the effective date of the 2005 bankruptcy law approached. In October 2005 alone, more than 600,000 cases were filed. In 2006, filings dropped sharply, suggesting that the new law caused many to accelerate their filings, and that many petitions that would have been filed in 2006 (or later) were pushed forward by the enactment of bankruptcy reform. In the first half of 2007 nonbusiness filings increased by 48.3%, compared with the first half of 2006, but remain far below pre-BAPCPA levels. Congressional Research Service ' The Library of Congress Prepared for Members and Committees of Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most