News
U.S. Recurring Jobless Claims Jump to Highest Since End of 2021
Recurring applications for U.S. unemployment benefits rose to the highest level since the end of 2021, adding to evidence that it is taking unemployed Americans longer to find a new job, Bloomberg News reported. Continuing claims, a proxy for the number of people receiving benefits, advanced to 1.96 million in the week ended May 31, according to Labor Department data released today. Meanwhile, a measure of new filings that smooths volatility climbed to its highest level since August 2023. The spike in recurring claims coincides with a slowdown in hiring, suggesting that out-of-work people are struggling to find employment. However,…
Chapter 7 Bankruptcy Filings in April 2025
American Bankruptcy Institute on 5/2/25 reports that US nationwide Consumer Chapter 7 Bankruptcy Filings in April 2025 are an Increase of 16% above April 2024 US nationwide consumer Chapter 7 bankruptcy filings; and total nationwide bankruptcy filings (all Chapters, consumer and business bankruptcy filings) in April 2025 are an increase of 9% above April 2024 total US bankruptcy filings The 30,961 individual chapter 7 filings in April 2025 represented a 16 percent increase over the 26,781 filings recorded in April 2024, according to data provided by Epiq AACER, the leading provider of U.S. bankruptcy filing data. Total individual bankruptcy filings…
Growing Number of Americans Are Using Buy Now, Pay Later Loans
Credit & Collection e-newsletter of 4/28/25 reports: A growing number of Americans are using buy now, pay later loans (BNPL loans) to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday. The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs. In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy…
Notice: All dollar amounts in US Bankruptcy Code increased by 13.2% on 4/1/25
Every 3 years, the dollar amounts in the US Bankruptcy Code, 11 USC 101 et seq, are adjusted for inflation. On 4/1/25, all the dollar amounts in the US Bankruptcy Code adjusted for inflation. Because there has been a total of 13.2% inflation in the past 3 years (last adjustment before 4/1/25 was on 4/1/22) the dollar amounts in the U.S. Bankruptcy Code each increased by 13.2%. Chapter 13 bankruptcy, and “SubV” Chapter 11 bankruptcy each have debt limits. A person cannot file Chapter 13 bankruptcy (individual wage earner repayment plan bankruptcy) or SubV Chapter 11 bankruptcy, unless dollar amount…
Debt Collection Activities Through the Treasury Offset Program (TOP)
The Social Security Administration (SSA) announced on Thursday that it will immediately resume debt collection activities through the Treasury Offset Program (TOP) that had been paused since 2020, reports Credit and Collection e-newsletter of 3/23/25. Why It Matters The move marks a shift in agency policy as the SSA looks to strengthen program integrity and reduce financial shortfalls. It comes as part of President Donald Trump‘s broader initiative to reduce government spending and eliminate inefficiencies. The Department of Government Efficiency (DOGE), established under his administration, has played a key role in identifying areas for budget reductions across federal departments and…
American Bankruptcy Institute 2/4/25 newsletter reports Direct Lenders Face Rising Default Risks, Analysis Firm KBRA Says
Direct lenders face rising default risks in 2025, with 5% of middle-market borrowers struggling under heavy debt and worsening business performance, according to a quarterly report by credit rating analysis firm KBRA, WSJ Pro Bankruptcy reported. The prolonged high-interest-rate environment has put pressure on certain sectors, based on KBRA’s analysis of 1,903 private-equity-owned middle-market companies in the U.S. and Europe that hold a collective $922 billion in debt. Housing, construction, discretionary retail and physician practices are among the industries most susceptible to inflation and elevated borrowing costs, said John Sage, one of the lead authors of the report. Specifically, highly…
California Bill—if passed by California state legislature and if signed into law by Governor Newsom–Would Provide a Year of Mortgage Relief to Fire Victims
[as reported in the Credit & Collection e-newsletter of 1/29/25] The proposed legislation which has been introduced in the California Legislature, after the Palisades and Eaton fires of January 2025, if passed by the California Legislature, and signed into law by the Governor, would block foreclosures and allow homeowners who’ve suffered financially due to the L.A. fires to freeze payments without penalty. Several major lenders have already reached agreement with Gov. Gavin Newsom to provide voluntary relief. If it becomes CA law, this CA state legislation that would make it easier for victims of the Los Angeles County fires to…
California Emergency Declaration: Impact on Collection Operations
Credit & Collection e-newsletter of 1/9/25 at 11:59 pm suggests credit collection agencies may want to make accommodations for borrowers, such as payment accommodations, such as deferrals or extensions, and loan modifications to the rate or term, due to state of emergency declared in Los Angeles county due to wildfire damage, but it appears giving borrowers accommodations is not mandatory: Gov. Gavin Newsom declared a state of emergency as wildfires rage. ACA members should have plans in place to modify consumer outreach strategies and monitor areas with disaster declarations. The Los Angeles-area wildfires, expected to cause $50 billion in damages…
US Credit Card Defaults Surge To $46B In First 9 Months Of 2024
Credit & Collection e-newsletter of 1/3/25 says that US credit card defaults have reportedly surged to $46 billion in the first 9 months of 2024, which is said to be the highest since 2010. Credit card defaults are now up more than 50% year-over-year. And defaults of seriously delinquent credit card loan balances have more than doubled during the past 2 years. Notably, the bottom-income consumers were hit the hardest “due to years of elevated inflation and interest rates.” In addition to this, the savings rate of the bottom third is now 0%, according to the latest update from Moody’s.…
Reuters Bankruptcy Trends to Watch in 2025
American Bankruptcy Institute reports that the same industries that made increased bankruptcy filings in 2024 year, can be expected to keep filing bankruptcy at increased rates in 2025 year: Rising interest rates, inflation, higher labor costs, and post-pandemic shifts in consumer spending were common factors cited by companies that filed for bankruptcy in 2024, Reuters reported. Business bankruptcy filings rose 33.5 percent in the 12 months ending Sept. 30, 2024, according to statistics from the Administrative Office of the U.S. Courts. Bankruptcy experts expect those factors to continue to drive companies over the brink next year. Several particularly hard-hit industries…