Law360, New York (August 13, 2008) -- The economic downturn continues to take its toll on the corporate world, with business bankruptcies surging in July to the highest levels since 2006, according to a monthly tally by a bankruptcy research firm.

July was the hottest month for bankruptcy filings since the number of filings cooled off after new bankruptcy laws took effect nearly three years ago, new data show. Last month, 5,664 businesses sought to liquidate or restructure under bankruptcy protection, the highest monthly total since Congress’ overhaul of the Bankruptcy Code took effect in October 2005, according to Automated Access to Court Electronic Records. AACER’s data shows that this is only the third time in the past few years that the monthly total has topped 5,000.

Generous credit conditions and low defaults in thefirst nine months of 2007 helped business bank-ruptcy drop 5% over the 2006 fiscal year, but experts say filings are likely to rise dramatically in 2008.

The Administrative Office of the U.S. Courts said25,925 businesses sought bankruptcy protection in the fiscal year ended Sept. 30, 2007, down from 27,333 in the2006 fiscal year.

Tighter credit, rising commodity prices, and slipping sales aren't slamming just Wall Street; now small businesses are getting hit.

More businesses filed for bankruptcy in April, 2008, than in any month since new bankruptcy laws took effect in 2005, according to a company that tracks federal court filings.

NEW YORK -- US commercial bankruptcies soared 46 per cent in May from a year ago and many more are expected as the slowing economy chokes consumers and businesses, according to a bankruptcy management firm.

There were some 5,233 commercial bankruptcy cases last month, up from 3,589 in the year-ago period, according to AACER, a database of US bankruptcy statistics.