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Report: Bankruptcies, Late Payments, Mortgage Delinquencies Kick Off 2009

The deteriorating economy is evident in recent consumer credit woes as bankruptcies, past-due credit card payments, and delinquent mortgages are beginning to pile up according to a new report by ""Equifax Inc."":http://www.equifax.com
The company issued its monthly Credit Trends Monitor Report to its customers, showing that in January, consumers continued to drop behind in their credit card payments, the number of mortgage holders who were 30-days-past due was up by 50 percent since January 2008, and personal bankruptcies also increased significantly year-over-year.
To add to the economic woes, Equifax said, home equity line of credit 30-day delinquency rates also saw an accelerated month-to-month increase, rising 3.39 percent from December 2008 to January, the largest jump in 10 years. Home equity delinquencies (30-days past due) increased more than 48 percent from January 2008, and Equifax said that approximately 65 percent of these delinquencies were in the South Atlantic and Pacific regions, reflecting two states - Florida and California - where the housing bubble was the greatest.
Dann Adams, president of Equifax's U.S. Consumer Information Systems, commented, ""The rapid increase in unemployment in the fourth quarter of last year may have led to many of the economic ills that the data shows were even more pronounced in January.""
Adams said that continued increases in mortgage delinquencies indicate that a housing correction has yet to take hold. ""The latest measures such as loan modification programs and declining interest rates have yet to kick in,"" he said. However, Adams pointed out that low cost foreclosures flooding the market are pushing prices down and providing bargains for buyers.
According to Equifax's data, consumer bankruptcies continued to rise, with January figures 25 percent higher than in January 2008. Most of the increase was in Chapter 7 filings, a liquidation proceeding in which a debtor receives a discharge of all debts, which came in 37 percent higher than the same period last year, the credit company said. Those filing Chapter 13, a reorganization bankruptcy enabling filers to pay off debt over a set period of years, increased only six percent, Equifax reported.
Based on Equifax's data, sourced from the company's nearly 200 million consumer credit files, credit scores also continued to decline, indicating that future payment capability could be negatively impacted.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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