Adopting needs-based consumer bankruptcy would save creditors nearly $30 billion over the next three years, according to a study released Tuesday.

Legislation requiring high-income debtors to repay bills would reduce the cost of bankruptcy filings by 16% through 2000. The average consumer would save $68 a year in lower interest rates and prices.

"The legislation would slow the increase in these costs," said Mark Lauitano, senior vice president of WEFA Inc., a Boston-based economic consulting firm that conducted the study for MasterCard International and Visa U.S.A.

The study found that consumer bankruptcy filings-if the system is not changed-would cost $95 billion in 1998, $154 billion in 1999, and $221 billion in 2000. Of these expected losses, 85% are attributable to consumers seeking to eliminate all debts in Chapter 7. The remainder represents those who repay some debts in Chapter 13.

A needs-based system could result in as much as a 15% decrease in the growth rate of consumer filings, according to the report. It also found that as many as 15% of traditional Chapter 7 filers would be forced to repay debts in Chapter 13.

William P. Binzel, vice president of government relations at MasterCard International, said the savings are significant. "If Congress could save $30 billion in a government program, it would jump at the opportunity," he said. "This is roughly what NASA's budget is over three years."

Further savings are impractical, he said. "What the bills were designed to do is go after debtors who have the ability to repay a significant portion of their debt over a five-year period of time," he said. "It was not intended to squeeze every penny out of someone who needs the protection of the bankruptcy system."

Rep. George W. Gekas, R-Pa., introduced a needs-based bankruptcy bill last week. It would use a formula to determine whether consumers eliminate debts in Chapter 7 or repay them in Chapter 11. It is similar to a bipartisan measure introduced in the House last year.

Philip S. Corwin, a partner at Federal Legislative Associates who represents the American Bankers Association, said Congress cannot afford to put off bankruptcy reform. "Total bankruptcies will double in the next four years at current rates of increase," Mr. Corwin said.

Consumers filed a record 1.33 million bankruptcy petitions last year and are expected to file more than 1.5 million petitions this year.

The study is based on a review of 7,000 bankruptcy petitions filed in four states.

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