Last year was a record breaker for bankruptcy filings. There were a total of 1,577,651 bankruptcies in 2002, an increase of 5.7 percent over the previous year, according to data released by the Administrative Office of the U.S. Courts. The last three months of 2002 showed a slight improvement, with filings declining 1.5 percent from the third quarter.
Personal bankruptcies rose 6 percent from 2001 to 2002 and accounted for the overwhelming majority of the filings, nearly 98 percent. High levels of consumer debt contributed to the rise in bankruptcies, according to the American Bankruptcy Institute (ABI), a nonpartisan organization that analyzes bankruptcy issues. Federal Reserve data shows that consumer debt reached an all-time high of $1.7 trillion in 2002.
While personal bankruptcies rose, the number of business bankruptcies declined by 4 percent from 2001 to 2002. Even so, last year saw some of the largest corporate bankruptcies in history. Leading the way was Clinton, Miss.-based WorldCom, which had pre-bankruptcy assets of $103 billion. Other high-profile corporate bankruptcies in 2002 include Conseco, Global Crossing, UAL, Adelphia Communications, Kmart, and NTL, according to New Generation Research, Inc.