Bankruptcy filings are on the decline in the US. According to the American Bankruptcy Institute (ABI), consumer bankruptcies declined by 6% in the first quarter of 2011, with total consumer fillings for the first three months of 2011 totaling 340,012, down from 363,215 recorded in early 2010. Bankruptcies in upstate New York, Pennsylvania, and Arizona continued to fall for the 11th straight month while bankruptcy continues to be a major problem in California where one in every six bankruptcies originates nationwide. Contributing to the overall downtrend in bankruptcies is the fact that credit card companies have proactively took initiatives to protect themselves by limiting access to new lines of credit. Credit card companies rescinded issued cards to non-credit worthy customers and it made it harder for those with bad credit to apply. With less credit available, Americans are spending less and thus racking up less debt.
Also helping is the fact that foreclosures have been on the decline.
Financial institutions have made a lot of mistakes over the years that lead to the Great Recession and it appears that they may be learning from them. Bankruptcy rates in the US are still pretty high compared to the rest of the world but it seems like the industry is making baby steps towards rectifying their actions.
As always, stay tuned to Credit Cards Professor for more credit card related news and updates.
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