U.S. bankruptcies dip may hit 1.5 million in '09

NEW YORK (Reuters) - Fewer Americans filed for bankruptcy protection in November than a month earlier, but the rate of filings stayed near a four-year high and total filings appeared headed toward nearly 1.5 million for the year.

There were 115,502 U.S. bankruptcy petitions in November, down 13 percent from October but up 26 percent from a year earlier, according to data compiled from court filings by Automated Access to Court Electronic Records, which is part of Jupiter eSources LLC in Oklahoma City.

For the first 11 months of 2009, bankruptcy filings totaled about 1.33 million, 21 percent more than the 1.1 million recorded for all of 2008.

"It has certainly been a robust year, and we expect 1.5 million filings this year," AACER President Mike Bickford said in an interview. "In the most likely case, we would expect filings to rise another 15 to 20 percent in 2010."

On a daily basis, the rate of filings in November fell just 4 percent from October, when there were two more filing days, and was the second highest since 2005.

The month had 6,987 commercial bankruptcies, down from October's 7,998 and below the 7,464 monthly average for 2009. Consumer finance company CIT Group Inc's November 1 bankruptcy was one of the five largest in U.S. history.

There are signs the weak U.S. economy may be turning a corner, with gross domestic product having risen in the third quarter at the fastest pace in two years and November payrolls having shrunk less than economists expected.

Yet Bickford said bankruptcy data will take a while to reflect any economic improvement.

"Bankruptcies lag the economy, and you won't see any effects of a better economy for at least six months, and perhaps 12 to 18 months," he said. "Bankruptcies are a last resort for many people, and you're seeing filings now that typically arise from problems six to 12 months ago."

The full-year record for bankruptcy filings was set in 2005, when 2.08 million petitions were filed.

More than 600,000 of these came in the first two weeks of October 2005, ahead of changes to the U.S. Bankruptcy Code that made it harder for consumers to erase their debts and for businesses to restructure without interference from creditors.

From January to November this year, 71 percent of U.S. bankruptcy filings came under Chapter 7, while 28 percent came under Chapter 13 and most of the rest under Chapter 11, AACER said.

Consumers often use Chapter 7 to get a new start on their financial lives. Chapter 13 lets people discharge some debts. Businesses typically use Chapters 7 and 11.

(Editing by Steve Orlofsky)