Nearly 70% of Americans support tougher bankruptcy laws

<p>ISLANDIA, N.Y.-More than two-thirds of Americans (69%) support the proposed bankruptcy reform legislation (H.R. 333) currently before Congress, according to a nationwide survey by the Cambridge Consumer Credit Index. Of the more than 1,000 adults surveyed by telephone, 79% said that if the bill was enacted, they would be less inclined to file for bankruptcy if they were in a position to do so. The study was conducted by ICR/International Communications Research and sponsored by The Debt Relief Clearinghouse. Credit union groups have been strong supporters of bankruptcy abuse reform, stating that, as non-profit organizations, bankruptcy losses are passed on to their members. Credit unions have been particularly interested in three components of the bill: means testing prior to filing for Chapter 7; mandatory financial education prior to filing for bankruptcy; and voluntary reaffirmations for credit unions. The legislation has been stalled in a conference committee for about a year. The issue has become a perennial subject of debate for the last five years. For the month of June, the Cambridge Consumer Credit Index rose by six points from May, indicating that consumers are taking on and planning to take on more debt. When the number increases, it means Americans are taking on more debt than they are paying off. The Cambridge Consumer Credit Index is a forward looking economic indicator gauging consumer spending and debt. The main reasons that consumers ask for credit counseling to help get a handle on debts included frustration with high bank rates and fees (27%); income reduction from a lower salary, less overtime, or layoff (25%); future goals like buying a house or saving for retirement (14%); and getting in too deep by overspending (13%). In June, 19% of Americans said they took on a little more debt than previously, while 12% said they took on a lot more. However, 70% say they have paid off some debt with one-quarter saying they paid off a lot of debt. According to the survey, Americans are continuing to take on more debt, as indicated by May’s numbers, which showed 72% paying off debt and 28% taking on more. During this month, 19% of those surveyed plan to take on more debt, while 18% will pay off some of their debt. In May, only 175 planned to take on more debt. [email protected]</p>