The number of individuals who filed for personal bankruptcy at the nation’s courts in fiscal 1999 totaled 122,741, up about 19,000 from the previous year and marking a new record for the fourth year in a row, the Supreme Court said Thursday.
According to the top court, the annual number of personal bankruptcy cases remained below the 10,000 mark until fiscal 1989, immediately before the burst of the bubble economy.
However, the figure surged to 40,000 in fiscal 1992.
Despite decreasing temporarily, individual bankruptcies began increasing again from fiscal 1995, and surpassed the 100,000 mark in fiscal 1998.
According to the Supreme Court, many cases of individual bankruptcy in fiscal 1999 were recession-related.
In once instance, a company employee filed for bankruptcy after the firm’s president borrowed money from a consumer finance firm in the employee’s name and failed to repay the loan.
The employee apparently could not have refused the request because if the firm went under the employee would have been out of a job.
An individual may file for bankruptcy with a court if he or she becomes unable to repay debts. The applicant presents a district court with the necessary documents and a judge determines whether the person really has no assets and cannot repay the money.
People who are determined bankrupt by the court are effectively blacklisted by financial institutions and become unable to borrow money or take out a mortgage for several years.
Kiyoto Akiyama, a lawyer versed in handling personal bankruptcy cases, said corporate failures, job losses and reduced income were the main reasons behind the high figure.
Despite the Economic Planning Agency’s declaration that the economy hit bottom in April 1999, Akiyama said that from the viewpoint of a regular citizen, the economic recovery has yet to be felt.
“There are still a great many people who are saddled with the weight of high-interest mortgage payments from the bubble-economy years, and I predict that the number of personal bankruptcies will continue to increase,” he said.