Just 3,350 bankruptcy petitions were filed in Eastern Washington last year, abruptly ending a five-year trend of filings hovering near or above the 10,000 mark.


The 2006 total represented a 71 percent decrease from the record 11,506 petitions filed in 2005 in the U.S. Bankruptcy Courts Eastern District of Washington, and was only slightly higher than the 3,133 petitions filed in October 2005 alone.


Jake Woodwell, a Spokane-based data-quality analyst for the court, attributes the sharp drop largely to the Bankruptcy Abuse Prevention & Consumer Protection Act, which took effect on Oct. 17, 2005. That federal law established additional requirements that debtors must meet before theyre eligible to file for protection from creditors and also while bankruptcy proceedings are under way.


The record number of new filings in 2005 stemmed from an unprecedented surge in the fall of that year, when debtors rushed to submit their petitions before the new bankruptcy law went into effect.


Joseph Esposito, a bankruptcy attorney for the Spokane law firm of Esposito George & Campbell PLLC, says, I think there was a lot of apprehension on the part of filers that it would be more difficult to file if they waited until after the new law was enacted. He contends the media and others fanned that fear.


Esposito says he believes, though, that the number of petitions will begin to climb again. He notes that consumer savings are as low as theyve been in many years, and says a lot of housing here has been bought recently at top-of-market prices.


Things will get worse before they get better, he predicts.


Woodwell says businesses filed less than 4 percent of all new bankruptcy petitions in the district last year.


He says the number of new bankruptcies first topped the 10,000 mark in 2001 and, until last year, only dipped below 10,000 in 2004, when about 9,400 new cases were filed.


Although there were very few cases in 2006, the bulk of those cases were not iin Spokane, but in the Richland-Yakima area, says Esposito.