Original Source

Tue Feb 19,12:03 PM ET

Bankruptcies Soared to New High in 2001

WASHINGTON (Reuters) - With the U.S. economy mired in recession, debt-burdened individuals and businesses went bankrupt in record numbers last year, the Administrative Office of the U.S. Courts said on Tuesday.

The total number of bankruptcies filed during the year jumped 19 percent to 1.49 million from 1.25 million in 2000. That total easily surpassed the previous record of 1.44 million bankruptcy filings in 1998.

Economists had predicted for some time that bankruptcies would reach new highs in 2001 as the recession took a toll on the finances of consumers and corporations alike. Congress has also been trying to tighten U.S. bankruptcy laws, which may have spurred some debtors to file preemptively.

Personal bankruptcy filings totaled 1.45 million over the calendar year, up 19 percent from 1.22 million in 2000. Business bankruptcies rose slightly less sharply, increasing 13 percent to 40,099 from 35,472 in the previous year.

The total number of new bankruptcy filings between October and December of 2001 was 364,921, a rise of nearly 18 percent over the same quarter last year, but still below the record 400,394 bankruptcies filed in the second quarter of 2001.