Saddled with massive liabilities, Life Co., one of Japan's six major consumer credit companies, filed with the Tokyo District Court for protection from creditors under the Corporate Rehabilitation Law on Friday.

Its liabilities totaled 966.3 billion yen -- the fourth largest by a Japanese company declaring bankruptcy.

The firm said it will continue its service to credit and cash card holders as well as its credit sales practice. The firm's payment to its registered shops and credit card companies in partnership will also be continued, it said.

The Tokyo-based financial institution has about 5.3 million card holders and about 700,000 registered member shops.

"Although we tried to rehabilitate our business on a voluntary basis, we could not help but give up that choice. The only alternative we had was legal rehabilitation," said Toru Mega, president of the firm.

Mega attributed the failure to the severe lending practices adopted by financial institutions after the country's financial crisis erupted. These practices affected the firm, particularly after the Long-Term Credit Bank of Japan, Life's main bank, was temporarily nationalized in 1998.

One of Life's lawyers said the LTCB, which has promised to assist Life, will continue loans to the firm for the time being.

The firm estimates its capital deficit was 96.8 billion yen at the end of fiscal 1999, ending March 31, after it wrote off 120 billion yen in bad loans. The firm declined to comment on the current status of its bad loans.

Under the legal proceedings, Life and its trustee will draw up a business plan to rehabilitate its operations, the firm said.

The firm was founded in 1952 and currently has about 2,630 employees.

In November, Life reached a basic agreement with GE Capital Services Corp. of the United States to negotiate a possible business and financial alliance, but GE Capital halted negotiations earlier this month.