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BRIEFLY / THE ECONOMY

U.S. Bankruptcies Dropped 5% Last Year

February 24, 2001|Bloomberg News

The number of U.S. bankruptcy filings dropped by 5% during 2000, according to the Administrative Office of the U.S. Courts. That was the third consecutive year that bankruptcy filings for both businesses and individuals declined. Analysts noted that banks moved to tighten credit availability in 1997, when bankruptcies approached an all-time high. Much of the decline in personal filings last year came from a 7% decrease in the number of individuals filing for bankruptcy under Chapter 7, which allows debtors to escape liability for credit card and unsecured debt. One category of bankruptcy filings that increased last year was Chapter 11 business filings, which allow a business to continue operations while formulating a plan to repay its creditors. Chapter 11 filings rose 6%.

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