Refis Slow Bankruptcy Filings

Mortgage refinancings and debt consolidation loans will help stop the rise in personal bankruptcies this year, according to SMR Research Corp., Hackettstown, N.J. SMR projects that the number of personal bankruptcy filings will be flat this year after hitting a record 1.33 million in 1997 and decline slightly in 1999, largely because of low interest rates that make refinancing possible."Refinancing reduces their debt service payments and it frees up that money for other uses -- auto loans and credit cards," said Leigh Smith, SMR vice president for data products. Lower interest rates also help consumers with adjustable-rate mortgages, he said. However, the consumer finance research group believes that bankruptcies will hit record levels again once interest rates go up. "Other than interest rates, all the other basic drivers behind bankruptcy look worse," SMR president Stuart Feldstein said.