U.S. Bankruptcy Rate Near 5-Year High

Posted By on June 4, 2010

By Jonathan Stempel

NEW YORK, June 3 (Reuters)     The pace of U.S. bankruptcy filings edged up in May to the second-highest daily level since 2005, reflecting the difficulty Americans have in working off excess debt even as the economy improves.

There were 133,459 U.S. bankruptcy petitions filed in May, 10 percent more than a year earlier, according to preliminary data released Thursday by Automated Access to Court Electronic Records, or AACER.

While filings fell 9 percent from April’s 146,209, this was because there were just 20 business days in May compared with 22 in April. Average filings per day edged up to 6,673 from 6,646.

Experts say bankruptcies typically peak in an economic cycle between six and 18 months after an economy bottoms out.

This is in part because many people and businesses seek other means to work off their debts before seeking court protection.

U.S. gross domestic product rose at a 3 percent annual rate from January to March, the Commerce Department said last week, after a 5.6 percent growth pace in the fourth quarter of 2009.

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