PR - Business Bankruptcies Rise 43 Percent in 2007

The downturn of the nation’s economy that started in the fourth quarter of 2007 brought about a final surge in business bankruptcies, pushing the year-over-year increase of corporate filings to more than 43 percent, according to research and analysis from global accounts receivable insurer Euler Hermes.

The final figures recently released by the U.S. Bankruptcy Courts show that 28,322 businesses sought bankruptcy protection in 2007, compared to a total of 19,695 in 2006. Euler Hermes analysts had forecasted 29,600 business bankruptcy filings for 2007.

“The escalation in bankruptcies is a direct result of the deterioration in the U.S. economy, which is now in recession,” said Euler Hermes ACI Chief Economist Dan North. “Businesses are now facing a serious combination of factors which will almost certainly continue the trend of increased bankruptcies, including skyrocketing energy and commodities prices, plummeting house prices, job loss, a slowing consumer, record foreclosures and delinquencies, and tightening credit conditions. Bankruptcies are likely to continue rising for the next year as the economy struggles through the recession.”

North’s current business bankruptcy forecast for 2008 calls for an increase of “at least 5 percent,” with a total of at least 31,000 businesses seeking protection from creditors.

Euler Hermes ACI is North America’s oldest and largest provider of trade credit insurance and accounts receivable management solutions and is the US subsidiary of the Euler Hermes Group. Headquartered in Owings Mills, MD, the company protects and insures more than $150 billion in US trade transactions annually. Additionally, Euler Hermes ACI provides a suite of receivables management services that includes commercial third party collections, receivables management outsourcing, and international collections. For more information, visit www.eulerhermes.us.