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Bankruptcy filings decline in state, U.S.

Bankruptcy filings in Maryland dropped by more than 10 percent overall for fiscal 2011, according to federal data released Monday.

That’s slightly sharper than the national average, according to latest figures from the U.S. Courts. Total filings in the U.S. dropped 8 percent, from about 1.6 million to 1.46 million, for the year ending Sept. 30.

New bankruptcies in Maryland during that period totaled 26,829, compared to 29,938 a year earlier.

The decline in Maryland’s new filings came across the board, with business cases dropping nearly 22 percent, from 879 to 686. Of those, Chapter 11 reorganizations dropped 34 percent — about twice as much as Chapter 7 liquidations fell.

Due to that disparity, only about one-fifth of all business filings were Chapter 11 cases, compared with one-fourth last year.

Non-business filings, which make up the vast majority of bankruptcies in Maryland, were down about 10 percent overall. Chapter 7 liquidations slowed by a mere 2.5 percent, while Chapter 13 plans fell more than 30 percent, from 7,674 to 5,343.

The decline in filings is especially notable because the figures for fiscal 2010 had come close to meeting the levels experienced in the run-up to October 2005, when reforms took effect under the Bankruptcy Abuse Prevention and Consumer Protection Act.

For the year ended September 2005, there were 1.78 million bankruptcies nationwide and 30,448 in Maryland — numbers that were considered especially high because of the incentive to file before the new law’s effective date.

A year later, filings had dropped to 1.1 million nationally and 18,608 in Maryland, according to the U.S. Courts.