The keys to effective bankruptcy and repossession strategies

As consumers struggle to make payments, it is vital for credit unions to implement successful bankruptcy and repossession strategies. This is especially critical today with inflation, mass layoffs, cost-of-living increases, high interest rates and the resumption of student loan payments contributing to consumers’ plummeting financial health. MarketWatch Guides reported that, between 2022 and 2023, U.S. household debt surged by a staggering $800 million, reflecting a 4.8% uptick, while credit card debt skyrocketed by 16.6%.

Higher amounts of debt bring higher delinquency rates – and bankruptcies and repossessions soon follow. Bankruptcy filings saw a noticeable increase in 2023, with consumer Chapter 13 and Chapter 7 filings spiking by 18% and 17%, respectively. The Federal Reserve Bank of New York reported that repossession rates are the highest seen since the fourth quarter of 2010, with a current 7.7% annual rate of consumers behind on auto payments.

As your credit union handles the high rates of delinquencies, bankruptcy filings and repossessions, it is critical to implement various workflow strategies that will help regain lost assets, effectively assist accountholders and maintain compliance standards.

Equip your credit union for success by embracing these key ideas in your bankruptcy and repossession strategies:


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