Bank of America, Chase Hit Hard By Customer Bankruptcies

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Bank

of America, Chase Hit Hard By Customer Bankruptcies

Bank of America

and JPMorgan Chase & Co., like credit card giants Citi and

Discover before them, disclosed losses in the millions as the

result of increased bankruptcies. Thousands of consumers had

rushed to declare bankruptcy under more favorable terms before

a new bankruptcy law took effect, significantly increasing the

losses credit card companies would normally have to absorb.

Bank

of America expects an extra $400 to $500 million in chargeoffs

(losses due to unpaid balances) in the fourth quarter; JPMorgan

Chase expects $700 million more than in the third quarter, according

to quarterly reports the companies filed with the Securities

& Exchange Commission.

Published 11/10/05 (Modified 01/21/13)