The number of consumer bankruptcies filed in the United States last month increased by 40 per cent, a report from the American Bankruptcy Institute (ABI) revealed this week.

A total of 106,266 bankruptcies were filed by US consumers in October - a figure up 20 per cent from September and a 40 per cent increase compared with the same month last year.

"October's sharp spike in new consumer bankruptcies confirms the severe financial stress on household budgets caused by high debts, flat incomes, and declining home values," said ABI executive director Samuel Gerdano, according to a Reuters report.

He added that total bankruptcy filings have reached over 100,000 for the first time in one month since the US Bankruptcy Abuse Prevention and Consumer Protection Act came into effect in 2005.

Meanwhile, official figures from the US Commerce Department revealed that in September 2008 consumer spending fell to its lowest amount in four years.

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