Net chargeoffs in the credit-card trust of Capital One Financial increased in September, in what some are calling the first signs of fallout from the spike in bankruptcy filings wrought by the Bankruptcy Reform Act, which was officially enacted this week. Chargeoffs increased 145 basis points to 4.81% in September from 3.41% in August, according to a report from Barclays Capital.
"The recent surge in bankruptcy filings has likely filtered through into trust performance," wrote Barclays Associate Director and consumer ABS strategist Juliet Jones. Barclays reported 102,863 debtors rushed to file bankruptcy last week "in an apparent attempt to beat the Oct. 17 enactment date for the new bankruptcy law." Total year to date filings are now at 1.46 million filings, 19.4% ahead of last year's comparable period.