Bankruptcy filings surge in 2008

Personal and business bankruptcy filings surged last year as the U.S. economy spiraled downward, new data showed Thursday, a trend experts say they expect to continue in 2009.

Personal bankruptcy filings — which represent the bulk of all filings — increased 31 percent, to 1,074,225 from 822,590 in 2007, according to data released by the Administrative Office of the U.S. Courts.

Business filings jumped 54 percent, to 43,546 from 28,322 a year earlier.

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The numbers confirm "that bankruptcies are on the rise, and will continue to spike upward in 2009," said Samuel Gerdano, executive director of the American Bankruptcy Institute, a group of bankruptcy judges, lawyers and other experts.

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"We expect filings to reach 1.4 million or even more this year, especially if Congress changes the law to permit homeowners to modify home mortgages" in bankruptcy proceedings, he added.

That legislation, part of President Barack Obama's housing rescue plan, cleared the House on Thursday evening on a 234-191 vote. It faces a tougher road in the Senate amid the banking industry's opposition and reservations among moderate Democrats which nearly derailed the bill in the House.