By MARCY GORDON The Associated Press Friday, November 14, 2003; 7:01 PM 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. The upward trend 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 economic indicators. The filings "are being overwhelmingly driven by individuals with household debt," said Samuel Gerdano, executive director of the American Bankruptcy Institute, a group of bankruptcy judges, lawyers and other experts. "They do reflect the buildup of heavy consumer debt." The total number of bankruptcy filings, including 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 economist Ken Mayland, president of ClearView Economics in Cleveland. 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 and was endorsed by the White House. But the Senate hasn't acted and is unlikely to do so 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. Banks, credit card companies and retailers, who have pushed for such legislation since 1997, contend that abuse creates a hidden tax of about $400 a year on every American family through higher interest rates and other charges passed on to consumers. Consumer and civil rights groups and unions oppose the legislation, saying it is unfair to low-income working people, single mothers, minorities and the elderly 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 much of the rise in personal bankruptcies, saying the issuers make credit too easily available and flood consumers with solicitations to open new accounts. --- On the Net: Administrative Office of the U.S. Courts: http://www.uscourts.gov American Bankruptcy Institute: http://www.abiworld.org Â© 2003 The Associated Press Historically low rates, but bankruptcies at higher levels. What would happen when rates start creeping up thus placing additional burden on debt service requirements? Can the fed maintain these low levels much longer, or additional USD devaluation is the answer?