As the Oct. 17 implementation date for the Bankruptcy Reform Act rapidly approaches, a second surge of bankruptcy filings has beset the ABS market as consumers continue rushing to file before the more stringent law takes effect. Though the increase in bankruptcy filings, a repeat of the one that took place this spring, is expected to cause a proportionate increase in chargeoffs, analysts report that most credit card ABS will be unaffected.

The law requires persons filing for Chapter 7 bankruptcy protection to undergo a means test to determine which debtors meet certain minimum income requirements and thus can afford to pay off some debts. Those deemed able to pay will be pushed into Chapter 13 bankruptcy, under which a repayment plan will be worked out.

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