Hibah Yousuf staff reporter of CNNMoney stated yesterday that personal bankruptcies have increased nine percent. The total number of bankruptcies for 2009 will be in excess of one point four million. This will be the highest annual number of personal bankruptcies in four years and an increase of thirty percent from last year. The American Bankruptcy Institute  reported that there were 135,914 personal bankruptcy cases filed last month. Nearly one third were Chapter 13 bankruptcy cases, in which consumers are put on a repayment plan.

According to ABI executive director Samuel Gerdano, “The nearly 9% increase in consumer bankruptcy filings in October, together with a 7% jump reported in business cases, demonstrates the sustained stress on the U.S. economy.”

 Maureen Thompson, legislative director for the National Association of Consumer Bankruptcy Attorneys in Washington said, “People are still carrying a lot of debt in terms of credit cards and home equity loans, and unemployment is still rising. All of those factors are hitting consumers at the exact same time.”  She went on to explain that while some Americans tap into their savings and retirement funds in order to survive, many families are struggling after being unemployed for longer than expected. Add to that a decrease in the value of their homes, rising interest rates and reducing credit lines, they are being forced to declare bankruptcy.