Question

why have so many consumer bankruptcies occured in recent years? how might those bankrptcies been prevented?

Answer 1

Consumer bankruptcies have increased in recent years because of overspending and living beyond the means by consumers which has been promoted by access to cheap credit and lack of adequate rigor while extending credit by credit unions and banks. Also, the reduction in the stability and security of a job has also reduced and thus the paying back ability have thus been affected leading to increasing in bankruptcies.

These bankruptcies might have been prevented through:-

1) Better appraisal of customers before extending credit

2) Consumers not overspending and living within their means.

3) Credit scoring done in an objective manner and removing bias from the system