Bankers who are investigating the causes of the latest bankruptcy wave might as well be searching for the meaning of life.

Conversations with leading researchers in the field of bankruptcy prevention elicit a range of economic, sociological, and psychological factors that defy simple analysis.

As a result, bankers find it increasingly difficult to predict when and how a bankruptcy may occur or to prevent a customer from going straight into bankruptcy rather than working out a debt repayment plan.

"There are many misunderstandings in the field," said Stuart Feldstein, president of SMR Research Corp. and the author of a study on the causes of bankruptcy released this year.

Like others who have studied why people go broke, Mr. Feldstein said he believes the topic is so complex that many factors are given too much weight while others are ignored.

For example, he said, a lost job, viewed by many within the banking industry as a primary determinant of bankruptcy, "is not as catastrophic as it seems."

Other factors that deserve more attention, he said, are the rate of uninsured consumers and the divorce rate.

Mr. Feldstein also said that demographic factors, such as increased urbanization, have contributed to the rise in bankruptcies by reducing the event's stigma.

"In rural areas or small communities, everyone tended to know each other's affairs," he said. "If you find bankruptcy embarrassing, you only do to the extent that people know that it's happening to you.

"As people migrate to the cities, they tend to lead more anonymous lives without everyone in the community knowing all about them or even knowing their names." As a county's population increases, so does its bankruptcy rate, Mr. Feldstein said.

Still, many bankruptcy experts contend that the notion Americans have lost a sense of personal shame about bankruptcy is greatly exaggerated.

Durant Abernethy, president of the National Foundation for Consumer Credit, estimated that his organization refers about 7% of the people it counsels every year to bankruptcy court.

"Still, we see a lot of people who take very seriously the concept of bankruptcy as failure," he said, "and they don't want to get in that box."

Ken Crone, a vice president at Visa U.S.A. and the author of a recent study titled "Consumer Bankruptcy: Causes and Implications," said about 90% of the consumers he surveyed saw bankruptcy as a personal failure.

However, he did note that, as the proportion of adults in the 25-44 age group rises, so do bankruptcies. This age group may not view bankruptcy as having the same stigma as it did for older generations and may be more inclined to file for bankruptcy.

Furthermore, adults in this age range are in their peak consumer years and typically spend and borrow more than people in other age groups. As a result, they often have fewer reserves to draw upon if they go bankrupt.

"I'm not sure that the stigma is gone," said Mr. Crone, "but the economics of the way that people are living and the lack of financial education and discipline that they demonstrate have changed significantly."

The new generation of consumers may include profligate spenders who are unable to regain financial health.

The rise of advertising by lawyers is often cited as a goad to bankruptcies.

"There's now a significant amount of lawyer advertising for all kinds of things, and bankruptcy is one of the up-and-coming subjects," said Mr. Feldstein. "If you open the Yellow Pages of the telephone directory in most large cities, you get a taste for this; but in some cities, including in California, bankruptcy is an advertising item in radio and television as well."

However, Mr. Feldstein is somewhat more concerned about the lack of health and automobile insurance as a more alarming trend in relation to personal bankruptcy.

Census Bureau data indicate that 15.3% of the population have no health insurance. "Each one of those people is one serious injury or illness from a one- to three-month hospital stay, which most people most people cannot pay for, period," said Mr. Feldstein.

He also cited a correlation between high bankruptcy rates and states where auto insurance is not required, such as Tennessee. This state has the highest bankruptcy rate in the country.

One bankruptcy expert argued that creditors may contribute to the high level of bankruptcy by their willingness to give bankrupt consumers chances to pile up more debt.

"Years ago," said Bill Trethaway, vice president at CCN Inc., an Atlanta software company, "if you filed bankruptcy, you were virtually eliminated from getting any credit for 10 years.

"Now, if you reestablish yourself through a secured card or other means, you can build yourself a new file and start getting credit fairly easily, even during that l0-year period." Mr. Trethaway works with credit bureaus on developing scoring systems.

The Visa study found that issuers are not nearly proactive enough in recovering balances from cardholders who have filed for bankruptcy. Issuer activities relating to bankruptcy account for only 3% of total collections- related expenses.

The average bankruptcy chargeoff for participants in the Visa study was $3,265 - 52% greater than the average contractual chargeoff and 71% more than the average balance of an active credit card account.

Stepped up efforts on the part of issuers to help consumers stave off bankruptcy would help preserve potentially healthy accounts in a competitive era for card issuers.

"Banks are working with their cardholders much more leniently than they ever have," said Mr. Trethaway. "It's so hard now to get new accounts, so the last thing you want to do is lose the account, particularly if it's a potentially good account."

Ms. Nameth is a freelance writer based in New York City.

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