Nov. 3 (Bloomberg) -- More Americans filed bankruptcy in October than in any month since changes to U.S. bankruptcy laws in 2005 as unemployment and falling home prices prevented consumers from paying their debts.

The number of individuals filing bankruptcy rose 25 percent to about 131,200 from a year earlier, according to data compiled from court records by Oklahoma City-based Jupiter ESources LLC. The 1.2 million bankruptcies filed through October have already surpassed last year’s total of 1.1 million.

Businesses also continued to struggle to pay creditors; corporate bankruptcies climbed about 30 percent from October 2008, according to Jupiter. Chapter 11 bankruptcies, where a company attempts to reorganize rather than liquidate, rose the most in four months to 1,327 in October, according to Jupiter.

“Despite the recovery, several sectors remain in crisis,” Kurt M. Carlson, a bankruptcy lawyer at Chicago-based Much Shelist Denenberg Ament & Rubenstein P.C., said in an e-mail. “The real estate markets haven’t improved. Vacancy rates continue to climb. Those in manufacturing are cutting costs.”

The American Bankruptcy Institute estimates personal filings will reach 1.4 million by the end of the year. That would still be less the record 2.1 million bankruptcies in 2005, when 630,000 Americans filed in the two weeks before bankruptcy law revisions made it more difficult discharge debt.

To contact the reporter on this story: Bill Rochelle in New York at wrochelle@bloomberg.net; Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net.

Last Updated: November 3, 2009 12:50 EST