Bankruptcies jump 40 percent in 2007

The American Bankruptcy Institute blames the mortgage crisis for heavy debt load, warns that this year could see more bankruptcies.

NEW YORK (CNNMoney.com) -- The number of Americans filing for consumer bankruptcy increased by nearly 40 percent in 2007, according to the American Bankruptcy Institute.

In a report released Thursday, the ABI said that the number of overall consumer bankruptcy filings reached 801,840 last year, compared to 573,203 in 2006.

"The roughly 40 percent spike in consumer bankruptcies during 2007 presages [an] even higher [number of] filings this year, as the heavy consumer debt load is made worse by the home mortgage crisis," predicted ABI Executive Director Samuel J. Gerdano.

However, the report also showed that the number of bankruptcy filings declined 7.5 percent in December from November. And Chapter 13 filings - those available to individuals with regular income whose debts do not exceed specific amounts - also showed a decline from November to December.

I predict that by 2010 having a bankruptcy or foreclosure on your credit report will be like having a divorce.... So common that creditors will not even flinch when they see it.

I am already seeing ads for apartments in my area that say " We're Foreclosure Friendly". My guess is you will be seeing a lot more of those coming to a complex near you also.