The pace of personal bankruptcy filings is slowing significantly, but 1997 is still expected to set a record for the fourth consecutive year.

The Administrative Office of the United States Courts said the rate of growth in filings has been declining since September. In the first quarter of this year, the annualized growth rate fell below its 27% pace for all of last year.

Visa U.S.A.-gathering data from federal bankruptcy courts-contends that this trend continued during the second quarter. (The government's June 30 numbers are not out yet.)

As a result, Visa has pared its projected growth rate this year to 18.6%, or about 120,000 filings fewer than expected.

"When May started to deviate from May the year before and June sustained that, we thought our original forecast was not realistic," said Kenneth Crone, a Visa senior vice president.

While bankruptcies are often viewed as a bellwether of national economic health, economists have restrained themselves from drawing grand conclusions about the auspicious news. The drop in bankruptcies-which appears evenly spread through the country-has been attributed to everything from improved credit counseling to low unemployment and consumers' general economic well-being.

While the trend is encouraging, some experts believe it should only inspire cautious optimism. MasterCard International, for one, did not reduce its projection. Visa's East Coast competitor maintains that bankruptcy filings will increase 23% in 1997.

William P. Binzel, vice president of government relations for MasterCard, speculated that Visa's projection may have been too high in the first place.

"We have not seen anything to indicate that we need to change our forecast," he said. MasterCard predicts 1.4 million people will file for bankruptcy in 1997; Visa estimates 1.3 million. Last year's record was 1.18 million.

Nevertheless, Visa is not alone in pointing to a slowdown in filings. Many analysts and economists agree that the peak growth period for bankruptcy has passed.

Montgomery Securities estimated that the peak was reached in the third quarter last year, when bankruptcies grew 30%. The brokerage firm maintained that bankruptcies will decelerate the rest of this year, barring significant changes in employment conditions.

There is also disagreement on why bankruptcies began soaring to record levels in the first place. While creditors have been scaling back their lending for the past year and a half, they deny their measures have had any impact on bankruptcy filings.

"I don't see evidence of tightening credit being a factor," said Mr. Crone. "Lenders have always had strict underwriting standards."

Instead, Mr. Crone pointed to the success credit counseling agencies have had in helping people before they file for bankruptcy. Industry sources said Visa gave $2 million to the National Foundation for Consumer Credit, an umbrella counseling organization supported by major banks and other consumer lenders.

Visa is sponsoring ads on the radio and in print promoting the foundation's services. Durant Abernethy, the foundation's chief executive, said it is "no longer the best-kept secret."

Economists agree that counseling agencies deserve some credit for the slowdown but say the issue is more complicated.

Ultimately, no conclusive evidence underpins any one theory, economists said. And therein lies the puzzle for Congress, which will soon weigh possible changes in bankruptcy law. The National Bankruptcy Review Commission, a panel appointed by Congress to study the issue, has been holding hearings and will make legislative recommendations in October.

Whatever the panel decides, few people disagree with one obvious explanation: A strong economy causes a downturn in bankruptcy filings.

Lawrence M. Ausubel, a professor of economics at the University of Maryland, said the decline in the growth of bankruptcies is "predictable" since the economy in the first quarter of this year was strong. However, he said that a significant leveling off in bankruptcy filings is unlikely because the national debt-to-income ratio remains high: about 85% versus about 70% a decade ago.

Household debt, which is at record levels, does not change rapidly. Therefore, bankruptcy filings will not move much either, he said.

Mark Zandi, chief economist and co-founder of Regional Financial Associates of West Chester, Pa., said he believes lenders in the mortgage, car loan, and credit card businesses who eased their underwriting standards played the biggest role in the rise of consumer debt.

"There is room for some optimism because lenders have been tightening their standards," Mr. Zandi said.

However, some observers believe the extent to which credit was tightened has been overstated. With direct mailings of credit card solicitations running at two billion a year, credit standards could not have been dramatically constricted, said one economist.

Lenders loosened their grip on credit in the first place because they were armed with new risk-based pricing software, which allowed them to lend to consumers who were less creditworthy or had lower incomes.

"Risk-based pricing has been fairly recent, but like any new technique, it takes fine-tuning and adjusting," said Robert W. Johnson of Consumer Credit Intelligence, a research firm in Lafayette, Ind.

Mr. Zandi said he believes risk-based pricing simply "didn't work this go-around."

Another striking phenomenon, economists said, is the fact that no one region stands out in terms of high bankruptcy growth rates. According to government data, filings increased by at least 15% in every state during 1996, and 46 states had their biggest year for filings. Most states had increases of 20% to 35%.

In the past, bankruptcy peaks occurred in isolated parts of the country and could be linked to regional economic conditions. For example, from 1984 to 1987 bankruptcies soared in Texas, Oklahoma, Louisiana, and Colorado. During that time, energy prices dropped, and those states were particularly hard hit. Also, from 1989 to 1991, during the last recession, the Northeast was pummeled by bankruptcy filings.

Some observers maintained that the nationwide bankruptcy wave was a direct result of credit that was to easy to obtain.

Hank Hildebrand, a Chapter 13 bankruptcy trustee in Tennessee, said, "I have seen some pretty irresponsible lending, like $50,000 in credit card debt for people whose only income is Social Security. Apparently no one checked their income."

Mr. Crone of Visa responds to such criticism by pointing out that bankruptcies as a share of total card accounts are relatively few. Only about 1% of bank card accounts end up in bankruptcy.

Nevertheless, lenders are not sneezing at the $30 billion a year that bankruptcy costs them. So the latest evidence of a slowdown in filings brings a glimmer of hope.

Visa's new projection "is interesting and hopeful, but it is still a little early" to see a meaningful trend in the data, said Edward O. Bankole, who tracks bankruptcy trends for And Moody's Investors Service.

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