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Consumer Bankruptcy Filings Surge Past One Million

Cheryl Phillips's picture

According to the American Bankruptcy Institute, consumer bankruptcy filings totaled 1,046,449 through the first nine months of 2009. The filings for the first three-quarters of 2009 were the highest total since the 1,350,360 consumer filings through the first nine months of 2005.

According to the American Bankruptcy Institute,consumer bankruptcies rose 41 percent in September from a year before and climbed from August. Adding to the bad news, government statistic were released today stating that the U.S. unemployment rate rose to a 26-year high in September at 9.8 percent.

The American Bankruptcy Institute said it expects consumer bankruptcies to climb to more than 1.4 million this year. Bankruptcy is a procedure allowing debtors, both households and businesses, to eliminate some bills and repay others over time.

"Bankruptcy filings continue to climb as consumers look to shelter themselves from the effects of rising unemployment rates and housing debt," said ABI Executive Director Samuel J. Gerdano. "The consumer filing total through the first nine months is consistent with our expectation that consumer bankruptcies will top 1.4 million in 2009."

Credit bureau Equifax Inc said recently that mortgage delinquencies were at a record level in August. They indicated personal bankruptcies are likely to continue to rise.

Cheryl Phillips
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source: American Bankruptcy Institute

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