About a dozen institutions - including Citicorp, MBNA Corp., and NationsBank Corp. - have formed a coalition to deal collectively with bankruptcy issues.

The program, called Bankruptcy Prevention and Counseling, focuses on credit card debt, which has been a growing concern - one that many institutions have also been addressing within MasterCard and Visa. Some observers say that if current delinquency and bankruptcy trends continue, such mass-issued, unsecured credit poses the greatest hazard to lenders.

Even as the credit industry seeks avenues of cooperation, no one is totally sure of the underlying causes of the bankruptcy wave, or the best ways to defend against it.

"It might be helpful for us to waive fees and lower interest rate payments, but one creditor acting alone is not going to be effective," said Phil Davis, senior vice president of NationsBank card services.

Mr. Davis sees the joint initiative as combining elements of customer service, education, and counseling. He expects the group to grow to 50 - as a matter of necessity.

"I am talking to other bankers now," said Maj. Gen. George Miller, president of the Armed Forces Benefit Association Industrial Bank in Colorado Springs. "I didn't used to do that, but I guess misery loves company."

That misery is the expectation that for the first time, U.S. personal bankruptcy filings this year will exceed one million.

He said he would like to know the risk scores his colleagues are using in assessing would-be borrowers.

Robert Morris Associates, a Philadelphia-based trade association for 3,000 credit and risk managers at major banks, is targeting risk scoring.

The association, which has its roots in commercial lending, is sponsoring its first consumer risk management conference next month as it seeks to provide a forum for lenders to share information.

"Our focus is the safety and soundness of the banks," said the association's president and chief executive, Allen W. Sanborn. He said bankers are concerned that people increasingly are filing for bankruptcy before making late payments or displaying other warning signs.

Most lenders contend that external factors are contributing to the bankruptcy trend. These include economic and social forces such as job losses caused by corporate downsizing, divorces, and other unforeseen personal crises.

Some say that consumers who are unable to manage their finances and lack responsibility for their actions are driving the worrisome trend. Consumers' lack of knowledge of alternatives to bankruptcy also is frequently cited.

Others blame lenders, particularly credit card issuers, for aggressively marketing to people with poor credit histories or people who are overextended and do not have the income to support their debts.

Though lenders concede they have made more credit available than ever before, they talk about a lessening of the shame associated with bankruptcy. An example may be a new television game show, "Debt," that takes off from the premise that people are under water - and gives them the opportunity to pay off all they owe.

"There is so little stigma attached to bankruptcy, and there are so many forms of credit available to people coming out of bankruptcy," said Beverly Wells, president of Wachovia Bankcard Services, Atlanta. "The real issue is for us is to make responsible loans."

Edward Bankole, an analyst at Moody's Investors Service, who produces a quarterly report on bankruptcy data, said a number of lenders have noticed that consumers who declare bankruptcy "are not novices. They know their options."

Mr. Bankole said some lenders blame bankruptcy lawyers for encouraging the growing number of filings.

Charles Dempsey, director of an Equifax Inc.-affiliated credit bureau, said people preparing for foreclosure on their homes in Memphis, where he is based, typically receive up to 15 letters from attorneys.

"They have runners who hand-deliver the letters and explain that you can keep the home after filing for Chapter 13," said Mr. Dempsey.

"Lenders are willing to compromise on debt, but unfortunately people are declaring bankruptcy before we can work something out," said Gen. Miller.

The National Foundation for Consumer Credit, a trade group representing some 200 nonprofit counseling agencies nationwide, is in the trenches with such people. It has found that many of them wouldn't file for bankruptcy if they knew of an alternative.

Durant Abernethy, president and chief executive of the foundation, said 82% of the 900,000 people who annually seek help from the affiliated agencies are insolvent, yet 300,000 of them do not file for bankruptcy.

Instead they enter debt-management programs, which allow them to pay back loans usually at reduced interest rates and waived late fees. "They are in the tank, yet they choose debt management, not bankruptcy," said Mr. Abernethy.

Of those 900,000 annual visitors to the 1,200 locations of the Consumer Credit Counseling Service, only 9% are advised to seek legal advice to file for bankruptcy.

A typical client of a debt-counseling office earns $24,000 annually and owes $19,000.

The lenders involved in the Bankruptcy Prevention and Counseling program have a similar goal to the credit foundation in providing credit cardholders with an alternative to filing for bankruptcy.

About six months ago NationsBank formed a bankruptcy counseling unit for its credit card customers who are insolvent or heading in that direction.

NationsBank and other lenders, like the credit foundation affiliates, are restructuring customers' debt, slashing interest rates, and waiving late fees.

NationsBank said it has saved 500 accounts from bankruptcy.

The banks are working together only as a referral service, Mr. Davis said. "We are staying clear of antitrust violations (by) not agreeing on what to do and how to do it."

A spokesman for MBNA confirmed it is involved in the effort and believes the network has "promise," but he declined to provide further details about MBNA's involvement.

Similarly, Citicorp and Citibank declined to discuss the effort other than to confirm their participation.

In addition, NationsBank is developing a video on bankruptcy and its ramifications and plans to send it to high-risk customers. Occasionally, NationsBank sends a statement insert with a similar cautionary message to "at-risk" customers.

For the past month NationsBank has used a highway billboard in Norfolk, Va., to advertise the services of the local credit foundation affiliate. The billboard ad is scheduled to run for three months. After gauging its effectiveness, NationsBank might try to persuade other lenders to do the same. Mr. Davis said about 3% of the Norfolk counseling agency's traffic has come from the billboard.

In the meantime, other lenders are slashing credit lines, raising interest rates on higher risk accounts, canceling accounts, and pulling credit reports to monitor customers' total debt.

One banker, who requested anonymity, said basic facts about bankruptcy and its effects on one's credit-history file are only half of what the public should know.

"Consumers should know that bankruptcy filings cost lenders millions of dollars, and that it is factored into the price of our services," said the banker. "A lot of the negatives surrounding bankruptcy have gone away, but if people knew" the more hidden costs, perhaps they would be less tolerant of the practice.

"We simply raise prices," the banker added. "It's not fair that everyone should have to pay for those people who file for bankruptcy."

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