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WASHINGTON-Like Sisyphus and his unruly boulder, credit unions and other lenders seem to be fighting an uphill battle to curb abusive bankruptcy filings. Even with the economy improving, personal bankruptcy filings continue to increase. “We’ve seen increased bankruptcy filings in good economic times; we’ve seen increased bankruptcy filings in bad economic times,” NAFCU Senior Legislative Representative Murray Chanow said. “So bankruptcies will continue to be a problem for credit unions. They would really have to decline a lot for bankruptcies to no longer be a problem for credit unions.” About half of credit unions’ charge-offs are the result of bankruptcies. According to data recently released by the Administrative Office of the U.S. Courts, the number of bankruptcy filings jumped 2.7% for the 12-months ending March 31, 2004. While business bankruptcies dropped 2% from 37,548 to 36,785 in the same period, personal bankruptcy filings rose 2.8% from 1,573,720 to 1,618,062. Total bankruptcy filings for the 12-month period ending March 31, 2004 came to 1,654,847, up from 1,611,268 the same period the previous year. However, this new total is slightly down from the 1,661,966 filed in fiscal year 2003, which ended Sept. 30, 2003. Credit unions have been working to pass the Bankruptcy Abuse Prevention and Consumer Protection Act (H.R. 975), which aims to curb abusive bankruptcy filings. Though the bill made it through in the House, the Senate version remains threatened by Senator Charles Schumer’s (D-N.Y.) amendment to keep those committing violent acts against abortion clinics from filing for bankruptcy to escape their fines. With time ticking away on the legislative clock during an election year, Chanow said the bill’s best hope is for consideration during a lame duck session. Congress can use this time to reconvene after the elections, possibly in late November and into December, to consider unfinished business. Chanow said it is hard to say how cooperative a lame duck session would be and would depend on who controls each chamber of the Congress and the White House. The current target for congressional adjournment is Oct. 8. “I’ve talked to people on the Hill. They’re very aware of the increase in bankruptcy filings. There is still an inclination to move the legislation,” Chanow explained. Chapter 12, which serves to protect family farmers, was the only category where bankruptcy filings fell (9.3%). Chapter 7 filings, where filers’ slates are wiped clean, jumped 3.6%, while Chapter 13 filings, where installment payments are made, increased only 0.3%. Chapter 11 filings, which permit businesses to reorganize, climbed 8.6%. Bankruptcies filed during the second quarter of Judiciary’s fiscal year (Jan. 1, 2004 -March 31, 2004) totaled 407,572, surpassing the previous quarter’s 393,348. [email protected]

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