4% in 2004

WASHINGTON-In 2004, lenders saw bankruptcy filings drop nearly 4%, according to the latest data from the Administrative Office of the U.S. Courts. Total bankruptcies filed in 2004 came to 1,597,462, a 3.8% dip from 2003 when 1,660,245 petitions were filed. Last year’s number is still over the 1.5 million filed in 2002. Personal bankruptcy filings represent the bulk of the cases at 1,563,145, a 3.8% decline. Business filings were at 34,317, down 2.1%. Most personal bankruptcies fell under the Chapter 7 category at 1,137,958, a 3.3% decline from the previous year. Chapter 13 was the next highest group with 449,129 filings, down 5.1% from 2003. The current bankruptcy reform bill (S. 256), proponents say, is aimed at pushing more filers away from Chapter 7, in which all debts are absolved after selling off certain assets, to Chapter 13 repayment plans. Business reorganization filings under Chapter 11 were up 7.7%, but overall business filings fell 2.1%. Chapter 12 (family farm) bankruptcies were down to 108 in 2004 from 712 the previous year. “This short-term decline is entirely consistent with our earlier findings of downward trends in consumer debt and credit card default rate,” American Bankruptcy Institute Executive Director Samuel J. Gerdano said. “However, credit card delinquencies and charge offs increased slightly in late 2004; this, together with concerns over the timing of the bankruptcy bill, may lead to a sharp rise in early 2005.” [email protected]