December 3, 2004

NACBA Media Contacts
Maureen Thompson, NACBA Executive Director (mail)
703-276-3251
Matthew Mason, NACBA President (mail)
313-872-1100 x 406
Henry Sommer, NACBA Vice President (mail)
215-242-8639

New Bankruptcy Statistics Show Aggressive Lending Practices Lead to Continued High Levels of Bankruptcy Filings

New statistics released today by the Administrative Office of the US Courts show that bankruptcy filings remain at historically high levels because of the aggressive lending practices of creditors, according to the National Association of Consumer Bankruptcy Attorneys (NACBA).

The data show there a total of 388,864 new non-business bankruptcy filings in the United States during the quarter ended September 30, 2004, including 274, 196 Chapter 7 filings and 114,454 Chapter 13 filings.  These numbers show a slight decline from the same period in 2003, but remain at a level significantly higher than in the 1990s.

"Bankruptcy filings remain high because consumers are struggling to keep up," said NACBA President Matthew Mason. "Consumer debt has been at record high levels compared to disposable household income. As long as that is the case we will continue to see filings, which closely track consumer debt burdens, at a very high level."

"The key problem is the predatory lending practices of creditors," Mason continued. "As long as they continue to market high-rate, high-fee credit to people who are going to have a hard time paying it back, debt levels will be too high and consumers will struggle. Borrowers who have no cushion for unexpected expenses such as uninsured medical problems are often left with no option but bankruptcy when these expenses arise."

NACBA intends to continue its fight to protect consumers´ bankruptcy rights. "The consumer credit lobby is expected to again push legislation that punishes borrowers in the next Congress," Mason said. "That is not the answer. Responsible bankruptcy legislation must address irresponsible behavior on the part of credit card companies, predatory lenders, and other lending institutions.

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