Feb. consumer bankruptcies up 29%
American Bankruptcy Institute sees filings in 2009 surpassing last year's level.
NEW YORK (CNNMoney.com) -- Bankruptcy filings by American consumers surged in February, according to a new report Wednesday.
98,344 consumers filed for bankruptcy protection last month, up 29% compared with 76,120 filings a year ago, The American Bankruptcy Institute said. Filings rose 11% versus January.
The ABI, a non-partisan research group, also expects bankruptcies in 2009 to surpass last year's 1.06 million filings. "We expect at least 1.4 million bankruptcies this year," said ABI Executive Director Samuel Gerdano in a written statement.
Gerdano said the total could be even higher if Congress changes bankruptcy laws this week. House legislators are expected to vote on a bill that would allow bankruptcy judges to reduce the principal and monthly payments on mortgages for borrowers in Chapter 13 bankruptcy protection.
President Obama has called on Congress to pass the legislation as part of his overall effort to help keep distressed homeowners out of foreclosure.
Lenders and some lawmakers oppose the mortgage "cramdown" bill, arguing that it is not narrow enough to be considered a last resort for troubled borrowers. Opponents also say the bill could further undermine investments tied to the housing market and create more turmoil on Wall Street.
Supporters of the legislation point out that it will only apply to borrowers who went into foreclosure prior to the bill's enactment. Judges would also only be able to alter mortgages for homeowners that file for Chapter 13 bankruptcy, which supporters say will help protect the lenders' interests.
Under Chapter 13, debtors are typically required to repay debts according to a budget plan that the court sets up. That compares with Chapter 7 bankruptcy protection, under which the debtor's assets are sold and many debts are erased.
Wednesday's report from the ABI showed that Chapter 13 filings, which made up nearly a third of all bankruptcies in February, declined 2.6% during the month.
The ABI based its study on data from the National Bankruptcy Research Center, which compiles statistics on bankruptcy filings. 
