ROANOKE TIMES 

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, April 22, 1995                   TAG: 9504240044
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: MAG POFF STAFF WRITER
DATELINE:                                 LENGTH: Medium

BANKRUPTCY FILINGS CONTINUE TO RISE

Consumers filing for liquidation are leading the way to an extremely busy year for the U.S. Bankruptcy Court for Western Virginia.

If trends continue, the district would have 6,700 new cases by year-end, second only to the court's recession-era peak of 6,846 in 1991, said John W.L. Craig II, clerk of the court. The number of bankruptcy petitions turned downward for the next two years, but began heading back up in 1994.

Craig called his estimate "rough and dirty" because it was reached by projecting the first quarter's filings.

The first quarter traditionally is the court's heaviest, because of the combined impact of post-Christmas bills and income taxes, Craig said. Despite that, April filings so far are running ahead of March.

The number of cases filed for individual or business reorganizations, which include a plan to repay creditors, is declining while the number of liquidations is rising.

The number of petitions for individual wage-earner plans actually is rising, but Craig said consumer liquidations are climbing so much faster that wage-earner plans are decreasing in percentage of total filings. Business and farm reorganizations actually are declining in number which, Craig said, "has me stumped."

Craig's theory is that business bankruptcies increase during economic recoveries. A solid economy, he said, usually results in a large number of new businesses founded by overly optimistic entrepreneurs. Many of them are destined to fail. "Business starts and bankruptcies seem to go hand-in-hand," Craig said.

The largest increase in filings in the Western District came in Harrisonburg, reversing a trend that has held over the last two years when the Roanoke division's filings grew more rapidly than either Harrisonburg's or Lynchburg's, Craig said.

The number of wage-earner plans fell from 15.47 percent of all filings in 1994 to 14.45 percent for the first quarter of this year. Business and farm reorganizations accounted for less than one-half a percentage point of filings in the first quarter of this year. 


 by CNB