WASHINGTON - June 4, 2009 - Consumer and commercial bankruptcy filings are on pace to reach a stunning 1.5 million this year, according to a report from Automated Access to Court Electronic Records.

While well below the record 2 million filings in 2005, the number of filings is up sharply from last year's 1.1 million, says Robert Lawless, professor of law at the University of Illinois.

Bankruptcy filings took a dramatic nosedive after a 2005 bankruptcy reform measure was signed into law to curb bankruptcy abuse and make it harder to erase debts.

But filings are surging back, in part because of rising job losses. The unemployment rate could hit 10% this year and tighter credit, dwindling 401(k) accounts, smaller paychecks, and less savings have left unemployed workers and those who are working but struggling with fewer financial resources to keep creditors at bay.

Over the past decades, consumers who were hurting financially could rely on credit cards to help them tread water. "The fact that consumer credit has tightened and shrunk explains why bankruptcy filings have now gone up so dramatically," says Lawless.

In May, the number of bankruptcy filings reached 6,020 a day, up from 5,854 in April, AACER says.

More debt-laden consumers are turning to consumer credit counseling services for assistance. But credit counselors say that it's harder than ever to help them.

"People are coming to us in much worse shape than they used to be," says David Jones, president of the non-profit Association of Independent Consumer Credit Counseling Agencies. "We used to be able to help 20% to 25% of people who came to us, and now we can only help 7% to 8%."

Ed. Note: This, coupled with the complete evisceration of social services in many states, could lead to some real ugliness this summer.