The following statement was issued today on behalf of the 3,500-member National Association of Consumer Bankruptcy Attorneys (NACBA) by bankruptcy attorney and NACBA president Carey Ebert of Fort Worth, TX:

“At a time when an estimated 6,600 American families are losing their homes to foreclosure every day, we welcome the Obama Administration’s support for changes to existing bankruptcy laws that will allow for judicial modification of home mortgages.The Obama Administration is the latest major player in this national debate to recognize the fact that judicial modification must be part of the solution to today’s worsening home mortgage foreclosure crisis.

It is painfully clear that the continuing, and indeed worsening, foreclosure crisis is perhaps the single largest impediment to this country’s economic recovery. We call on the banking industry to impose a moratorium on foreclosures until the Obama housing plan, including and in particular bankruptcy reform, has been fully implemented.

Just as important as forbearance by the banking industry is the need for action by Congress NOW. We agree with consumer advocates and others who say that Congress and the Administration should move with the same sense of urgency on curtailing this threat as they did with the economic recovery bill just signed into law.

Ever since the mortgage foreclosure crisis erupted into the public view in 2007, a broad array of consumer, civil rights, housing, community, labor and other organizations, as well as economists, have advocated judicial mortgage modification relief as an effective approach to stemming the growing tide of foreclosures – a solution that, unlike every other solution being considered in Washington, comes at absolutely no cost to U.S. taxpayers. This is one solution we know will work. The infrastructure already is in place. It is something the bankruptcy courts do every day with other assets. And, estimates are that this solution alone could cut foreclosures by at least 20 percent.

Data released by NACBA and others make it very clear that the foreclosure crisis will not be resolved through top-down voluntary efforts on the part of the financial services industry alone, no matter how many carrots or incentives are given. Judicial mortgage modification cuts through the impediments to sustainable mortgages. Courts must be empowered to implement economically rational loan modifications where the parties are unwilling or unable to do so on their own.”

ABOUT NACBA

The National Association of Consumer Bankruptcy Attorneys (http://www.nacba.org) is the only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. Formed in 1992, NACBA now has more than 3,500 members located in all 50 states and Puerto Rico.

SOURCE National Association of Consumer Bankruptcy Attorneys, Washington, D.C.

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Local card banks contacted for this story declined to comment on their financial outlook or the possibility of layoffs, but experts believe weak earnings will linger in the short term, and might even pose some long-term challenges to the industry.

“The increase in delinquencies in credit card debt is a major cause for concern,” said Robert Dye, senior economist for PNC Financial Services Group in Pittsburgh. “The scale is not as big as the home mortgage problem, but it definitely adds stress to the financial services industry at a time when they don’t need any more stress.”

Some are even predicting a fundamental change in mindset toward debt, prompting consumers to put off purchases, buy less-expensive substitutes, eat out less, and rethink their propensity to do so on credit. Consumer borrowing fell for the first time in more than a decade in August, the Federal Reserve reported last month. The decline, at an annual rate of 3.7 percent, reflected a sharp drop in the category of borrowing including auto loans and a smaller decline in the category including credit cards.

Last week, the digital-market analysis firm comScore.com, said that credit-card applications at the top 10 online sites dropped for the first time in the past five quarters, dropping 6 percent year-over-year in September. Last year at this time, applications were up 26 percent year-over-year. Consumers are doing all they can to take out additional lines of credit, comScore.com Vice President Jennifer Lanouette said.

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Source: Next big worry: Credit cards

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Read the full article at GetOutOfDebt.org, click here: Next big worry: Credit cards