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Consumer
bankruptcies about to balloon
By Holden
Lewis • Bankrate.com
The number of consumer bankruptcies declined
in 1999 and 2000, but the uptick in the last quarter of 2000 will
turn into a wave this year, says George Yacik of SMR Research, a
company that studies consumer financial markets.
Yacik estimated in September 2000 that bankruptcies
would increase by 10 percent to 20 percent in 2001. Now he believes
the figure will be around 20 percent.
Part of the reason, he says, is that people
are filing for bankruptcy now to beat the more-stringent requirements
to come. And low-income people are earning less: part-timers are
getting fewer hours of work and diners aren't tipping as much. For
people near the bottom of the income ladder, the loss of a few dollars
in tips every week can push them over the edge financially.
And while Yacik says it's too early to come
up with numbers, he believes that 2001 will set a record for bankruptcies,
exceeding the number of filings in 1998.
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