More than a million Americans are headed for bankruptcy in 2008, mostly due to crippling household debt, according to the American Bankruptcy Institute. There were 76,120 bankruptcy filings last month—a 37% increase over February last year, and the biggest monthly spike since the change in personal bankruptcy laws in 2005. February's filings were up 15% over January.
The figures are "the start of more to come for the balance of 2008," warned the institute's executive director, who said the bankruptcy rate could become even worse "if this contagion affecting the home mortgage market continues." Senate Republicans last week blocked a Democratic bill that would change bankruptcy laws to stem mounting home foreclosures by allowing judges to reduce mortgage rates to reflect decreased home value.