After two straight year-over-year declines, U.S. personal bankruptcy filings fell during the first quarter of the year, and credit card delinquencies and chargeoffs remained low during the first quarter.
Bankruptcy filings in the first quarter are 13.2 percent lower than last year’s numbers, though the number is below Fitch Ratings’ expectations for between a six and seven percent full-year decline. Overall losses from credit card delinquencies and chargeoffs fell below four percent during the first quarter, and delinquencies are 26 percent below last year’s rates.
Improvements in the quality of consumer credit, as well as fewer jobless claims and falling unemployment, have contributed to the continued decline in bankruptcy filings. Fitch said the trend will continue if consumers hold steadfast to their financial behavior and banks remain cautious in their underwriting but added that the standards have already loosened, which will level off the pace of improvement.
Consumer credit, driven primarily by auto and student loans, increased for the eighteenth straight month in March, rising eight percent year-over-year in just the past five months.
Revolving credit has remained steady at $850 million, despite a small increase from $847.46 in January. Hiring in March slowed down, with the economy adding fewer than 90,0000 jobs, though the unemployment rate fell to 7.6 percent as more of the jobless population fell out of the workforce calculation.