Almost
Two Thirds of Americans (64%) Support New Tougher Bankruptcy
Law, According to the Cambridge Consumer Credit Index
ISLANDIA, N.Y., May 6 /PRNewswire/ -- More than six out of ten Americans
(64%) support the recently enacted bankruptcy legislation, which makes it
considerably more difficult for debtors to discharge their debts under Chapter
7 and will force more people to repay their debts under Chapter 13 filings,
according to the Cambridge Consumer Credit Index. 36% of Americans are not in
favor of the toughened bankruptcy rules. Though a clear majority of Americans
are in favor of the new law, support for it has weakened from June 2003, when
the Index found that 73% were in favor of toughened bankruptcy laws and 27%
opposed it. The latest survey also found that 80% of Americans say the new
law would deter them from filing for bankruptcy, while 20% would be more
inclined to file for bankruptcy if they were overwhelmed with debt.
"The results of the Cambridge Consumer Index wildcard question show that
support for the new bankruptcy law, while still strong, has been declining
since the Index last asked the question two years ago. The biggest support
for the law comes from white, older consumers with high incomes and more
education, while the consumers who would be impacted the most-younger people
with lower incomes and less education and blacks, are more opposed to
toughening bankruptcy rules," says Jordan Goodman, spokesperson and financial
analyst for the Cambridge Consumer Credit Index.
The overall Cambridge Consumer Credit Index jumped 20 points from April to
71. The Index rose sharply on all three questions: past, present and future
intensions. The "Reality Gap," which is the difference between the amount of
debt consumers say they will pay off in the next month versus the amount of
debt they actually paid off a month later, soared to a record high 23
percentage points, up from 8 points in April. A month ago, 84% of Americans
planned to pay off debt, while a month later only 61% actually did so.
According to Chris Viale, President and C.E.O. of Cambridge Credit
Counseling Corp., "Debt is stressful for most Americans. It's a harsh reality
that bankruptcy has become a normal solution in our society for those who may
experience a loss of a job or unexpected medical emergency. These situations
often catapult them into serious debt that they think they cannot overcome.
We encourage consumers to consider financial education and credit counseling
as the step before considering bankruptcy."
In conjunction with the Index, Cambridge Credit Counseling Corp. is
releasing its monthly survey of people who have called in for credit
counseling services over the past month. Cambridge representatives ask
callers for the primary reason they found it necessary to get help with their
debts. From the 254 people who answered, this was the order of their
responses:
1. My income has been reduced from a lower salary, less overtime or layoff
(29.9%)
2. I am frustrated with high bank rates and fees (26.4%)
3. I want to improve my ability to achieve future financial goals like
buying a house or saving for retirement (17.3%)
4. I got into too much debt by overspending (9.8%)
5. Large medical expenses forced me to take on huge debts (6.7%)
6. Other (4.7%)
7. My lack of financial education caused me to take on too much debt
(2.8%)
8. Recently divorced or widowed (2.4%)
For more information on the survey see
http://www.cambridgeconsumerindex.com/index.asp?content=client_survey
The Cambridge Consumer Credit Index is a forward looking economic
indicator gauging consumer spending and debt. It is released on the fifth
business day of every month to coincide with the Federal Reserve Board's G19
release of consumer credit outstanding data. These findings are the result of
monthly nationwide telephone polls of more than 800 adults, conducted by
ICR/International Communications Research. The most recent survey was made last
week, and was sponsored by the Debt Relief Clearinghouse. For more
information about the Cambridge Consumer Credit Index, contact Paramjit Mahli
at pmahli@cambridgeconsumerindex.com or 631-786-6450 or the Index website at
http://www.cambridgeconsumerindex.com/.
Contact: Paramjit Mahli at 631-786-6450
SOURCE Cambridge Consumer Credit Index
Web Site: http://www.cambridgecredit.org
