High-flying '90s leave legacy of mounting bankruptcies.

Byline: From Register-Guard and news service reports

WASHINGTON - Bankruptcies have nearly doubled in the past decade, including more than 1.6 million people who filed for personal bankruptcy this fiscal year alone in a hangover of debt from the free-spending 1990s.

Continuing the record-setting pace of recent years, personal bankruptcies rose 7.8 percent in the 12 months ending Sept. 30, according to data released Friday by the Administrative Office of the U.S. Courts.

Oregon, with 24,009 personal bankruptcy filings in that period, had a higher percentage increase, 8.6 percent. The state, plagued by one of the nation's highest unemployment rates, has been hit hard by manufacturing and technology job losses in the past three years.

Nationally, the number of business bankruptcies fell 7.8 percent, but Oregon is running counter to that trend. The number of Oregon businesses filing bankruptcy in the last fiscal year reached 1,714, up 19 percent from a year earlier, according to data from the U.S. Bankruptcy Court.

The upward trend in personal bankruptcies has continued despite signs of recovery in the economy as effects linger from the consumer spending binge of the 1990s and the historically low interest rates that encouraged borrowing. The rate of bankruptcies generally lags behind direction changes in other indicators.

The total number of bankruptcy filings,both personal and business, grew by 98 percent, to this year's 1,661,996 from 837,797 in fiscal 1994.

However, the rate of growth in new bankruptcies slowed somewhat in the July-September period of this year compared with the same period a year earlier.

That is likely to continue as the effects of tighter credit-granting standards and the improving economy begin to be felt, some economists believe.

Employers have added workers in each of the past three months after many months of job losses.

``It's not surprising to see some sort of ongoing cleanup of credit problems even when the economy is on the mend,'' said Ken Mayland, president of ClearView Economics.

Mayland noted that credit standards were particularly lenient in the mid-1990s, a factor that has had an impact for years afterward.

Legislation making it harder for consumers to erase their debts in bankruptcy court won speedy, overwhelming House approval in March, but the Senate is unlikely to act before recessing for Thanksgiving.

Proponents of the legislation say it is needed to stop abuse of the bankruptcy system by people who can afford to repay their debts.

Consumer and civil rights groups and unions oppose the legislation, saying it is unfair and would remove a safety net for those who have lost their jobs or face mounting medical bills. Opponents blame the credit card industry for making credit too easily available.

Business reporter Edward Russo contributed to this Associated Press report.