US business bankruptcies up

Relevant offers

World

Spoof Qantas Twitter account shut down US financial crisis chair quits mortgage firm Apple shares break above US$500 Moody's warns France, UK, others over ratings Murdoch battle looms over Sun showdown NZ called a haven for illegal Indian cash Riots as Greece approves austerity Greece strikes bailout deal Gunns keen for NZ investment to fire up mill Telstra profit soars 23 pct on mobiles

US business bankruptcies rose 38 per cent last year, to a record since bankruptcy laws were changed in 2005, according to a bankruptcy data firm on Tuesday.

There were 89,402 bankruptcy filings by businesses last year, compared with 64,584 the previous year, according to data compiled from court filings by Automated Access to Court Electronic Records, which is part of Jupiter eSources LLC in Oklahoma City.

That's the highest yearly figure since 2005 when a flood of businesses and consumers filed for bankruptcy before changes to the US Bankruptcy Code that made it harder for consumers to erase their debts and for businesses to restructure without interference from creditors.

"It's a sizable increase over 2008," said AACER President Mike Bickford.

Personal bankruptcies jumped to 1,357,565 last year, from 1,031,562 the year before.

The data included bankruptcy codes Chapter 7, 11 and others. Consumers often use Chapter 7 to get a new start on their financial lives. Chapter 13 lets people discharge some debts. Businesses typically use Chapter 7 to relieve themselves of debt and Chapter 11 to restructure debt and operations.

The numbers have been "steadily up," said Bickford. "I don't think (2010) will be less than 2009. I think what's going to tell the tale for 2010 is the first quarter."

- Reuters