Bankruptcy filings in Eastern Washington fell in 2004 to the lowest level since the economy began to sour in 2000, ending a four-year streak of record-setting increases.


While bankruptcy activity here is still steady and remains in what would be considered a typical range, experts say the decline in filings could be a sign of a more healthy economy and job market.


Its reflective of people being able to get back to work and to get their incomes increased, says Kevin ORourke, a bankruptcy attorney at Southwell & ORourke PS, of Spokane.


Consumers and businesses last year filed 9,376 petitions seeking protection from creditors in the U.S. Bankruptcy Courts eastern district of Washington, which is based in Spokane. Thats 10 percent fewer than in 2003, when the number of filings reached a record of 10,429.


Last year marks the first decrease in filings since 1999. Since that year, the number of filings had risen steadily, setting new highs annually in the eastern district, which encompasses all of Washington state east of the Cascade Mountains.


Also, last year was the first year since 2000, in which the number of filings didnt surpass the 10,000 mark.


The decrease in bankruptcy petitions jibes with a national trend. Nationwide, about 1.62 million consumers and businesses filed petitions for bankruptcy protection in fiscal year 2004, which ended Sept. 30. Thats a 2.5 percent decrease from the previous year, when 1.66 million bankruptcy cases were filed. The figures for the eastern district of Washington, however, are for the calendar year.


Despite the decline in filings nationally, the Administrative Office of the U.S. Courts says the number of bankruptcies remains at a historic high, well above the 1.5 million mark first reached in 2002 and the 1 million level set in 1996.


Filings in the eastern district of Washington also are much higher than they have been historically. In 1996, consumers and businesses filed 5,731 bankruptcy petitions. In 1991, there were 3,954 filings.


U.S. Bankruptcy Court Judge Patricia C. Williams, who serves on the bench in Spokane, says that she doesnt expect the number of filings in the eastern district to change dramatically this year.


While a decrease in bankruptcy filings is a positive economic indicator for the region, she wouldnt make any conclusions based solely on a one-year drop.


Were still in that normal range of filings, and were just rolling up and down in that range, she says.


ORourke concurs.


A 10 percent decrease isnt surprising, he says. The rate of filings is still steady.


Of the 9,376 bankruptcy filings last year, 223 of them involved business debt. Thats down from 242 the previous year, but nearly matches the 226 in business filings in 2002.


During the past five years, business filings have accounted for between 2 percent and 4 percent of all filings in the eastern district.


Nationally, business bankruptcies fell in fiscal year 2004 to 34,817, down 3.8 percent from 36,183 a year.


In the eastern district, 78 percent of bankruptcy filings in 2004both consumer and businesswere under Chapter 7 of the U.S. Bankruptcy Code for liquidation of assets.


Another 21 percent of filings were for Chapter 13 petitions by wage earners seeking to create a plan to repay debt.


The remaining 1 percent involved reorganization under Chapter 11 or reorganization under Chapter 12 by agricultural producers.