As if today’s jump in the U6 unemployment rate wasn’t a sure enough sign of continuing weak consumers – the American Bankruptcy Institute is reporting that consumer bankruptcies in March jumped to their highest level since 2005. The consumer balance sheet is far from repaired. This recovery remains a government based recovery and little more:
“The 149,268 consumer bankruptcies filed in March represented the highest monthly consumer filing total since Congress overhauled the Bankruptcy Code in 2005, according to the American Bankruptcy Institute (ABI) relying on data from the National Bankruptcy Research Center (NBKRC). The March filing total represented a 34 percent increase from the February filing total of 111,693 and a 23 percent increase from March 2009 total of 121,413. Chapter 13 filings constituted 25 percent of all consumer cases in March, representing a 2 percent decrease from February.
“The sustained economic pressures of unemployment coupled with high pre-existing debt burdens are a formula for consumer filings to surpass 1.5 million filings,” said ABI Executive Director Samuel J. Gerdano. “As consumers continue to look to bankruptcy for financial shelter, annual filings will likely equal those averaged in the years leading up to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.”