Bankruptcy is booming in U.S.

The land of the free and home of the brave is fast becoming a nation of delinquents.

As consumer bankruptcy filings continue to shatter records in the United States, experts see no end to the rising trend, largely unabated since the 1980s.

Utah is not immune from the storm. The state leads the nation, with roughly one of every 33.6 households declaring insolvency. Last year Utah surpassed 22,000 filings, easily the most in the state's history.

"Bankruptcy is booming in the United States," said Samuel Gerdano, executive director of the American Bankruptcy Institute, a Virginia-based bankruptcy research organization. "2002 saw a record year of bankruptcy filings — 1.5 million cases. All projections show that 2003 will continue this trend, perhaps another national record in bankruptcy filings."

On Thursday, Gerdano joined a panel of attorneys, judges and educators in a teleconference to discuss bankruptcy trends.

He said 97 percent of the nation's bankruptcy filings are consumer cases, fueled largely by individuals encumbered by skyrocketing debt and poor saving habits.

"Filings are up in all regions of the country," Gerdano said. "It's not localized in any particular geographical area."

In fact, even wealthier areas are seeing increases.

"McClean (Va.) is one of the more wealthy suburbs of the Washington, D.C., area. Yet, in the eastern district of Virginia there is an increase in bankruptcy filings," said Jason Gold, a bankruptcy attorney.

Karen Gross, a New York law school professor, said Americans know little about financial issues.

"We don't teach about money or financial literacy very well," Gross said. "Indeed, in our culture we teach better about sex than we do about money."

A 1992 survey cited by Gross revealed that 96 percent of all consumers lacked the basic quantitative skills to compare credit card offers.

"If we encourage people to spend, we have a responsibility to give them the tools to understand the credit marketplace," Gross said. "Creditors have disproportionately greater knowledge about this area than do consumers, and we have to level the playing field."

Henry Hildebrand, a bankruptcy attorney in Tennessee, said the profile of the typical debtor has changed over the past two decades.