Research Team Says It Knows How To Cut Us Bankruptcies By 25

10.27.11 | Sarah Harnisch

 A new study from the University of Iowa indicates bankruptcies would be cut by 25-percent if credit limits from the 1970's were still in place. Sociology Professor Kevin Leicht says those limits capped mortgage payments at 30-percent of a person's income, credit cards had a one-thousand dollar limit and car payments were no more than ten-percent of income.  He said if those would be put back in place, a quarter of all bankrupt families in 2007 wouldn't have gone far enough into debt to file. Leight adds debt burdens now would have been unthinkable and even illegal three decades ago. He said the change happened so gradually most people didn't notice.