NEW YORK, March 3 (Reuters) - The number of U.S. consumers filing for bankruptcy jumped 29 percent in February from the year earlier, and the number is expected to keep rising as economic troubles deepen, according to the American Bankruptcy Institute on Tuesday.
Some 98,344 consumers filed for bankruptcy protection in February, according to the ABI which compiles data from the National Bankruptcy Research Center. It represents the most bankruptcies filed in the month of February since new bankruptcy laws went into effect in 2005.
“We expect at least 1.4 million bankruptcies this year,” said ABI Executive Director Samuel Gerdano, in a statement.
Gerdano added that the number will be even higher if Congress changes laws that would permit residential home mortgages to be modified under Chapter 13 of the Bankruptcy Code. Chapter 13 allows people to budget their future earnings under a plan in which creditors are paid in whole or in part.
BUSINESS BANKRUPTCIES RISE
Last year, 136 publicly traded U.S. companies filed for bankruptcy, up 74 percent from the year ago, according to law firm Jones Day.
“Yet another surge in corporate bankruptcies is likely, as companies across all sectors react to the global economic crisis,” Jones Day wrote in a report.
Escalating job losses, weakening consumer confidence and declining home values have pushed companies and individuals alike into bankruptcy.
IntraLinks, which provides a way to exchange bankruptcy data over the Internet, said in a release on Tuesday it had seen a 180 percent jump in bankruptcy and reorganization deals for the three-month period ended Feb. 15, compared to the same period last year.
Reporting by Chelsea Emery; Editing by Bernard Orr
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