Bankruptcy filings plunged 70 percent last year after changes to federal rules made it more expensive and burdensome to file for protection from creditors.
The Administrative Office of the United States Courts reported yesterday that federal bankruptcy cases fell to 617,600 last year from 2.1 million in 2005, when debtors rushed to file under the old rules.
Last year's filings were even 62 percent below the nationwide average for 2002 through 2004.
Experts said it was not completely clear why bankruptcy filings had dropped off so sharply.
"We know there is a perception out there that you can't file bankruptcy anymore," said Henry J. Sommer, a Philadelphia lawyer and bankruptcy expert who is president of the National Association of Consumer Bankruptcy Attorneys.
Sommer said 90 percent of the people who could file for protection from creditors under Chapter Seven of the bankruptcy code before the law changed could still do so.
Among the changes is a "needs test" of a borrower's ability to repay at least some debt.
Chapter Seven, the most common form of bankruptcy, provides a financial fresh start, allowing borrowers to walk away from their debts.
Sommer's organization is holding its annual convention at the Philadelphia Marriott from Thursday through Sunday.
He said that filing Chapter Seven was more expensive, with court fees having increased to $299 from $209. Filers also must pay $50 for credit counseling and $50 for credit education, which they did not have to do before.
Attorney's fees also are higher, about $1,500, up from $1,000 before the changes, Sommer said.
At the same time, fewer attorneys are handling bankruptcy cases now, at least in Philadelphia, than were doing so three years ago, said Alan White, a lawyer with Community Legal Services in Philadelphia, which serves low-income residents.
White also said it had become more difficult to file repeatedly, a strategy sometimes used by homeowners trying to prevent foreclosure.
It is not known how much major advocates of bankruptcy changes, such as credit card companies, have benefited from the decline in filings, White said. It is possible that overburdened debtors still are not paying their credit card bills, even though they are not in bankruptcy, he said.
Filings appear to be picking up this year, said Sam Giordano, executive director of the American Bankruptcy Institute in Alexandria, Va. He said filings currently numbered about 17,000 per week, compared with 10,000 to 12,000 a week a year ago.
The declines from 2005 to 2006 in the Philadelphia region - based on figures for areas covered by U.S. District Courts - were similar to those seen nationally on a percentage basis.
In the Eastern District of Pennsylvania, total filings fell to 8,325 from 29,207. Filings in New Jersey, which has one federal court district for the entire state, dropped to 14,041 from 49,597. In Delaware, which also has one district, filings were down to 1,528 from 4,368.