This week's bankruptcy filing by United Companies Financial Corp., a veteran lender to consumers with bad credit, caps a dismal period in the subprime mortgage sector and leaves in its wake more than $1.2 billion in debt.

Conspicuously exposed are as many as 22 banks, led by First Union Corp., that made an $850 million unsecured loan to the company in April 1997, when the subprime sector was booming. The loan was being renegotiated in October but talks between the banks and United Companies fell apart, observers said, and United Companies has drawn down the full $850 million on the loan.

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