Despite record unemployment numbers, consumer bankruptcies declined last month by more than 30 percent compared with last year, according to American Bankruptcy Institute data. Thats because federal courts have largely closed and consumers usually file for bankruptcy after theyve hit rock bottom, not in the middle of a crisis, said Bob Lawless, a law professor at the University of Illinois.

People are probably going to use consumer credit to smooth over the problems they have right now, he said. It doesnt make sense to file bankruptcy if you are just going to continue to pile up debts.

If Congress fails to act soon, bankruptcy courts could be overwhelmed by a record number of newly jobless consumers looking to shed crushing debts, said Raymond Kluender, an economist at the Harvard Business School.

More than 20 million people filed for unemployment in April. Some research indicates there could be 10 or more bankruptcy cases for each additional 1,000 job losses meaning 200,000 people could eventually end up filing for bankruptcy based on Aprils numbers alone, Kluender said. If the economic crisis continues, bankruptcy filings could eclipse those sparked by the Great Recession, which peaked at more than 1.5 million filings in 2010.

The actual capacity of the court system to process and adjudicate bankruptcy filings is quite fixed, and we have to start to think about what 20 or 30 million unemployed is going to mean, Kluender said.

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Congress may be forced to deal with coming wave of bankruptcies - Roll Call