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With the economy in the doldrums for years and unemployment at a record high, Japanese are racking up debts, falling prey to loan sharks and declaring bankruptcy by the thousands.

Individual bankruptcies soared fivefold in the last five years to more than 214,600 in 2002, up 34 percent from the previous year, the Supreme Court said. And experts say the nation’s culture of shame about debts and overall ignorance about the law are a big part of the problem.

“Japanese feel it’s an obligation to pay back money they’ve borrowed,” said Shigeki Kanamori, who gives legal advice to people struggling with loans gone sour. “They’re determined to pay it back even if it kills them.”

Experts say the decade-plus stagnant economy has produced a booming business of illegal lenders, some linked with mobsters, who charge outrageous interest rates — such as 1,800 percent a year, according to police — and hound borrowers with threats to wring payments out of them.

“This business is a cash cow,” Kanamori said.

Loan sharks are a growing menace in other parts of economically struggling Asia as well. Malaysia’s legislature is considering tough new laws against illegal money lenders following a spate of suicides by hopelessly indebted people.

Japanese police say 446 people were arrested last year on illegal lending charges, but the arrests are believed to be just a small portion of the rampant crime. Tokyo police have set up a special team to crack down on “yami-kinyu,” or racket lenders.

In most cases, the victims are just hardworking people.

A salaried worker or a housewife, for instance, usually starts out borrowing a small amount of money to keep up with mortgage payments or bills. But once they miss a payment, they get ensnared in the trap of owing more and end up turning to other dubious lenders — only to find themselves deeper in debt.

Lenders can legally charge up to 29 percent interest, but many exploit people’s ignorance about the law and charge much more, such as 50 percent over 10 days.

In Japan, family ties tend to be strong and the bad-debt nightmare can spread to relatives, who often cosign loans.

A 34-year-old Tokyo consultant, who asked that his name be withheld because he is worried about losing his job, had to declare bankruptcy when he found out that he had cosigned more than 120 million yen in bank loans for his father’s machinery business, which eventually went bust.

“There was no way I could pay that kind of money,” he said. “I learned you can’t trust even your own dad.”

This country was once a stranger to bad debts. In 1990, individual bankruptcies totaled a mere 10,000 a year.

Although corporate bankruptcies have also been on the rise as the economy drives companies into losses, individual bankruptcies accounted for 95 percent of the total filed last year.

The per capita individual bankruptcy rate in Japan is still slightly lower than in the United States, where individual bankruptcies totaled 1.47 million for the year ending June 30.

But fears are growing that the numbers here will continue to rise. The monthly unemployment rate reached 5.5 percent three times in the last year — the highest since the government began keeping track in the 1950s.

The tactics illegal lenders use are mostly psychological, such as harassment with constant telephone calls and threats to hurt their children, although real violence is also known to happen.

Many criminal lenders do their business over cell phones and don’t have a real address for an office. They target people already deep in debt who are desperate for funding and have a reputation as helpless easy victims.

Akira Kimura, an official at a business organization in Iwate Prefecture, said he receives two or three calls for help a week from people who have fallen victim to lenders, both legal and illegal.

“The victims are the kind of people who ask: ‘Are you a racket lender?’ ” Kimura said. “As though a racket lender is going to admit it.”

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