TOKYO - At 24, Miyuki, a sweetfaced bookworm, has just applied for bankruptcy protection.
Say "sayonara" to the stereotype of Japan as a nation of compulsive savers. An estimated 10 percent of the population - mostly young people - is deeply in debt.
Japan, where people once saved up for big purchases and then paid cash, has become a credit card society. A new generation of hard-charging Japanese, raised in one of the world's most affluent societies, is borrowing like never before - and some have a debt habit of dangerous proportions.
Miyuki will have plenty of company in bankruptcy court, a place where the Japanese traditionally have felt ashamed to set foot. Personal bankruptcies have tripled in the past decade, hitting a record of 43,946 last year.
She insists that she is not extravagant. Unlike the young Japanese women nicknamed "Chanel-ites" for their penchant for pricey designer clothes, she arrived at work recently in a baggy seersucker shirt worn untucked over khaki pants and scruffy black athletic shoes. Lately, she has been skipping lunch to save money.
Three years ago, however, she borrowed about $4,700 to pay for a move - then borrowed more to repay the creditors she could not appease on her meager wages as a waitress in a noodle shop.
Borrowing too much was easy: She had a fistful of credit cards that allowed her to make withdrawals from cash machines at any time of the day or night. She says the lenders knew she was borrowing new cash to pay off old debts and kept on lending. Her debts compounded at Japan's maximum legal interest rate of 40 percent a year. Now she owes more than $28,000.
In the early 1990s, most people who declared bankruptcy were real estate speculators who went bust when the Japanese "bubble economy" popped, sending stock and property prices plunging.
Lately, these victims of asset deflation have been joined by other unfortunates: office workers.
who haven't trimmed their spending to match incomes squeezed by the nation's worst postwar recession and gamblers caught up in the pachinko (pinball) craze.
; and an increasing number of young people who now have unparalleled access to easy credit at interest rates that are anything but forgiving.
"Young people have much less resistance to borrowing money" than their Confucian-influenced elders, said economist Masaki Masuda of the Fujitsu Research Institute. "'Play now, pay later' is the new philosophy."
Consumer borrowing, to finance anything from designer clothes to restaurant bills, vacations abroad or even groceries, has tripled since 1985.
"A decade ago, credit cards were for people who traveled overseas a lot and for very rich people," said Kichizo Sakamoto, executive director of the Japan Credit Counseling Association, which has fielded more than 40,000 calls from consumers in financial trouble.
Not anymore. By 1994, the Japanese were carrying more than $6,000 per capita in consumer debt - even more than the average American, who owed $3,700, according to the Japan Credit Industry Association. Japanese still save at three times the U.S. rate, although the savings rate has been steadily dropping, from 23.2 percent of disposable income in 1974 to 12.8 percent in 1994.
In industry surveys, 68 percent of those over 50 say they have never borrowed except for a housing mortgage. But overall, the percentage of non-borrowers has declined from 64 percent in 1990 to 56 percent this year.
As of 1994, the 124 million Japanese had more than 230 million credit cards, quadruple the number a decade earlier. Credit card purchases increased 7 percent last year despite the recession; spokespersons say it's because customers now whip out the plastic to pay small bills they would have used cash to settle a few years back. Even though most Japanese pay off their balances immediately, too many do so by borrowing from other sources - then borrowing again to meet the new debts.
In the postwar period, the government exhorted people to save more; thrift was not just a necessity but a national virtue. The legendary Japanese frugality helped build record trade surpluses, but with those came irritation from the rest of the world.
Some economists argue that increased spending benefits the country by pushing the domestic economy out of recession and boosting imports, thereby easing trade frictions. The credit card explosion has, therefore, not been viewed with much alarm here. The only worry is how the relatively small younger generation will support a huge group of retirees - estimated to hit 25 percent of the population in 2021 - without a giant cushion of savings to fall back on.
Credit cards are only part of the debt problem. Credit card growth pales in comparison with the performance of Japan's consumer loan companies, which have shed their seamy, loan-sharking image to emerge as financial superstars.
Taking advantage of Japan's low interest rates, these companies can borrow money at less than 4 percent a year and charge customers roughly 27 percent annually - or more - for unsecured loans. The consumer interest rate can shoot up to 40 percent a year if a customer is late making payments.
Not surprisingly, the loan companies have posted astronomical profits in the last five years. Yasuo Takei, founder of the industry leader, Takefuji, has been estimated to be worth $2.5 billion. At Acom, Takefuji's archrival, net profit rose 24 percent last year.
The Japanese salary system encourages credit use. Most workers get a relatively small monthly salary and two big bonuses annually, sometimes equal to four or six months' pay.
Lately, workers who may be earning less use loans to cover living expenses - or luxuries - and plan to pay off the loans at bonus time. But if a company does poorly, the bonus may be smaller than expected, and the debt hole deepens.
Moreover, Japanese have little financial incentive to save, because ordinary bank accounts pay less than 1 percent annual interest. But borrowers can drown in interest payments at frightening speed.
Japan's leading bankruptcy attorney, Kenji Utsunomiya, claims the declared bankruptcies are only the tip of the iceberg. He calculates that a million more debtors are teetering on the brink but have not filed for protection because of lack of education, the social stigma and fear of losing their jobs.
Each year, about 80,000 people, hounded by creditors, abandon their homes and jobs and start over using new identities - a process known as "fleeing in the middle of the night," Utsunomiya said, brandishing two thick files of letters from such clients.
"They haven't declared bankruptcy only because they don't know how," he said.
He has formed a debtors group that is pushing for lower interest rates and bankruptcy reforms.
Some dispute Utsunomiya's figures, but a Finance Ministry spokesperson said the agency is worried about the growing number of personal bankruptcies.
"We have warned the money-lending industry against over-loaning," said Yoshimasa Ishizu of the ministry's credit company department. "Unfortunately, we cannot force the industry to stop."
The bankrupt once were treated as pariahs in Japan, but Miyuki said that is changing. When creditors began calling her at work, she confessed her troubles to her boss, who, instead of firing her, helped her file for bankruptcy. In the old Japan, it was bad form to blame anyone but oneself for one's troubles, but Miyuki said the lenders have profited from her woes.
"At first, I was so grateful that they lent me money," she said. "But later, I realized they were getting a great deal."