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Personal Bankruptcies Rise 7.4 Percent AP - Thu May 15, 5:17 PM ET
WASHINGTON - The record-setting pace of new personal bankruptcies continued this year, with their number rising 7.4 percent in the 12 months ended March 31, according to data released Thursday.
The upward trend had been expected to continue this year in the sluggish economy and as effects still linger from the consumer spending binge of the 1990s.
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Consumer debt has reached record levels in recent years. But Federal Reserve (news - web sites) data showed that consumers became more cautious users of credit last year, expanding their borrowing at the slowest pace in a decade. The rise in credit card and other revolving debt was the smallest increase since the Fed began keeping records in 1968.
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In return for having their debts erased, people in Chapter 7 cases often turn over their property to bankruptcy trustees, except for necessities such as a car, clothing, work tools and possibly some equity in their homes, depending on state laws. Property with value is sold to pay creditors.
More at http://story.news.yahoo.com/news?tmpl=story&cid=509&e=6&u=/ap/bankruptcy_surge