A record 1.45 million Americans filed for personal bankruptcy protection in 2001, and business filings, including the largest-ever by Enron Corp, jumped 13 percent last year, according to data released by the Administrative Office of the US Courts.
The number of personal bankruptcies last year breaks the previous high mark of 1.4 million in 1998 and represents a 19 percent jump over the previous year.
"They'll set a new record this year," said Kenneth Posner, an analyst at Morgan Stanley Dean Witter & Co.
The increase comes as bankruptcy legislation backed by creditors such as MBNA Corp remains stalled in Congress. Posner and other analysts said it's unlikely that lawmakers facing re-election in November will make it harder for consumers to escape debts during an economic slowdown.
"I believe the legislation for all intents and purposes is dead," Posner said.
Higher unemployment is the main factor in the rise, with middle-income Americans carrying record debt levels and creditors showing a greater willingness to lend to people with tarnished credit histories, analysts said.
Posner said he expects personal filings to increase this year by another 15 percent, based on projections that the unemployment rate will peak at 6.2 percent by the middle of the year.
The US unemployment rate hit 5.8 percent at the end of December, a six-year high. Posner said he expects the number of personal bankruptcies in 2003 to remain steady or decline.
Total bankruptcy cases increased steadily to 1.4 million in 1998 from 284,517 in 1984. Filings decreased slightly in 1999 and 2000.
Business filings increased 13 percent in 2001 over the previous year, headlined by Enron's filing in December, which is the largest corporate bankruptcy in US history.
The 40,099 business filings last year are the most since 1998, when there were 44,367 filings.
More publicly traded US companies filed for bankruptcy protection in 2001 than in any other year, according to Boston-based BankruptcyData.com, a Web site that tracks such filings.
Last year, 257 publicly traded companies filed for bankruptcy, breaking the previous mark of 176 companies in 2000, according to BankruptcyData.com.
Chiquita Brands International Inc, the biggest banana producer, PG&E Corp's Pacific Gas and Electric and Finova Group Inc were among companies that filed for bankruptcy last year.
Analysts such as Harvey Miller, head of the nation's largest bankruptcy practice at the New York law firm of Weil, Gotshal & Manges, blame the increase in business filings on the economic slowdown that followed an unprecedented decade of expansion.
In January of this year, 17 publicly traded companies filed for bankruptcy protection, including 2,100-store retailer Kmart Corp, according to BankruptcyData.com.
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