The number of personal bankruptcy filings this year has exceeded a million, already breaking the record of about 900,000 set in 1992, when the U.S. was pulling out of a recession, Visa and MasterCard said.
The two bankcard associations blamed the bankruptcy laws, which they say have made it too easy for consumers to shirk their debt repayment responsibilities.
"Many people who are filing under Chapter 7 are walking away from their debts even if they can afford to pay back those debts," said Richard Jones, MasterCard's vice president for bankruptcies. Neither Visa nor MasterCard believes credit cards are part of the problem. Many experts, however, believe credit card issuers, in their quest to get customers who are willing to pay interest rates of 18 percent and above, have gone after precisely the kind of consumers who are likely to go belly up. Some issuers even try to place credit cards with people who have been through the bankruptcy process, American Bankruptcy Institute Director Sam Giordano said. Often these individuals, because they have had their debt legally expunged, are a better credit risk than others with a big debt load and large monthly payments they are unable to support. A study of 12,000 recent bankruptcy petitions showed that 14. …