Personal bankruptcies surge 9%

http://money.cnn.com/2009/11/04/news/economy/October_consumer_bankruptcy/index.htm?section=money_mostpopular

Personal bankruptcies surge 9%
Number of Americans filing for bankruptcy continues to climb. Total bankruptcies expected to top 1.4 million in 2009, highest in 4 years.

See all CNNMoney.com RSS FEEDS (close) By Hibah Yousuf, CNNMoney.com staff reporter
Last Updated: November 4, 2009: 12:50 PM ET

NEW YORK (CNNMoney.com) -- The number of Americans filing personal bankruptcies surged 9% in October and were on target for the highest annual total in four years, according to a report issued Wednesday.

The American Bankruptcy Institute, an industry research firm that relies on data from the National Bankruptcy Research Center, said 135,914 consumers filed for bankruptcy last month. Almost a third of the bankruptcies were filed under Chapter 13, in which consumers are put on a repayment plan of up to five years.

"The nearly 9% increase in consumer bankruptcy filings in October, together with a 7% jump reported in business cases, demonstrates the sustained stress on the U.S. economy," said ABI executive director Samuel Gerdano.

The group forecasts total bankruptcies to exceed 1.4 million in 2009, which would be the highest since 2005. It would also be an increase of at least 30% from last year.

The quarterly rate is at about the same level as prior to when the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) took effect. There were over 2 million bankruptcies filed in Calendar 2005 ahead of the law change.

There have been 1.18 million personal bankruptcy filings through Oct 2009, and the American Bankruptcy Institute is predicting over 1.4 million new bankruptcy filings by year end.

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