WASHINGTON-Personal bankruptcy filings in federal courts dropped 2.6% during fiscal year 2004 (the 12-month period ending Sept. 30). According to a report from the Administrative Office of the U.S. Courts, personal bankruptcies fell from 1,625,813 as of Sept. 30, 2003 to 1,584,170 at the same time this year. "Despite the drop in filings, bankruptcies remain at historic highs, well above the 1.5 million record first set in 2002″, the report said. Lenders, including credit unions, have been lobbying hard to get bankruptcy reform passed for a number of years now and have come close a few times. The credit union trades have been pushing for three key elements in the legislation: a meaningful means test for Chapter 7 filers, mandatory financial education prior to filing, and voluntary reaffirmations for credit union members. Business bankruptcies fell even more to 34,817, for a decline of 3.8%. Total bankruptcies were down from 1,661,996 as of Sept. 30, 2003 to 1,618,987 as of Sept. 30, 2004. Filings under chapters 7, 12, and 13 of the bankruptcy code fell this year, while chapter 11 filings rose 2.2%. Chapter 7 filings, which allow individuals to keep certain exempt property while the rest is sold to repay creditors, was down 2% from the previous year. Chapter 12 filings, designed to alleviate financially distressed family farmers, plummeted 65.9%. The large decrease was likely due to a lapse in the Chapter 12 protection in December 2003, the Administrative Office of the U.S. Courts observed. Also down were Chapter 13 bankruptcy cases, where creditors may be repaid in full or in part by installments; these filings were down 4.1%. On the other hand Chapter 11 cases, which allow businesses to reorganize while establishing a plan to repay creditors, grew 2.2%. For the quarter ending Sept. 30, filings totaled 396,438, down from the previous quarter at 421,110. This figure was also down from the second quarter of the fiscal year when bankruptcies reached 407,572. However, it was slightly up from the quarter ending Dec. 30, 2003 at 393,348 filings. -

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