WASHINGTON - Consumer bankruptcy filings rose 40 percent in 2007 as housing-market turmoil and increasing consumer debt levels led more people to seek protection from creditors, The Wall Street Journal reported Friday.
The American Bankruptcy Institute (ABI), using National Bankruptcy Research Center data, said total consumer filings rose to 801,840 in 2007 from 573,203 in 2006, according to the report.
ABI Executive Director Samuel J. Gerdano said the situation is likely to worse in 2008.
"The roughly 40 percent spike in consumer bankruptcies during 2007 presages even higher filings this year, as the heavy consumer debt load is made worse by the home mortgage crisis," Gerdano said.
The large annual increase came even with a decline in consumers filing for bankruptcy protection in December from November. There were 66,389 consumer filings last month, down from 71,799 in November.
The 2007 increase in filings still does not approach the 2,039,214 filings in 2005. That was the year a large number of consumers filed for bankruptcy protection before stringent new bankruptcy rules went into effect.
