It's 4:25 p.m. on a typical Friday. Workers throughout the valley are finishing up last-minute tasks, and traffic on I-15 is already creeping along. The weekend beckons.

Yet frenzied employees of the U.S. Bankruptcy Court office are just hitting the week's peak. Lawyers and paralegals spill out of the small office on the third floor of the Federal Court building at Fourth South and Main. Each carries stacks of paperwork to be filed before the office closes at 4:30.Stamp machines pound out a harried beat, marking the date and time on hundreds of pounds of legal documents. The cash register drawer doesn't close between entries workers are too busy ringing up thousands of dollars in filing fees.

It's a time of the week the office workers have come to dread because the pace never slackens it just multiplies.

The scene illustrates the upward spiral of bankruptcy filings in Utah during the past five years a trend that is expected to continue for the foreseeable future. Since 1982, the total number of bankruptcy petitions filed in the state has increased 98 percent, effectively doubling the workload of the court and its employees.

And the numbers continue to grow.

Bankruptcy court clerk Bill Stillgebauer said the number of filings rose 28 percent in 1985, 26 percent in 1986 and another 19 percent to 6,752 last year. During the first three months of 1988, 1,800 bankruptcy petitions were filed with the court an average of 600 per month. Stillgebauer said he wouldn't be surprised to see a 9 percent increase in filings this year.

"There's no question that the numbers probably exceed whatever national average there might be. I know they exceed those in some of the major metro areas."

For example, Stillgebauer said that in the first nine months of 1987 there were 6,614 bankruptcy petitions filed in Salt Lake City. "That number would exceed all the bankruptcy filings in any district in the (federal) 2nd Circuit. There are four districts in New York state, and one each in Connecticut and Vermont."

Of the U.S. Bankruptcy Court's 94 districts nationwide, 23 posted a larger number of bankruptcy filings than Utah. "But remember, there are only 1.6 million people in Utah," Stillgebauer said, noting that Utah is "terrifically ahead" in filings compared to the Eastern District of New York, where he used to work.

Unfortunately, the court doesn't have information that breaks down the bankruptcy rate per capita either for Utah or the nation. But Stillgebauer said he believes the rate here is high for the number of people who live here.

Why? He has several opinions none of them scientific about the reasons behind the trend. "The bankruptcy bar here is fairly active, and advertising isn't considered a violation of legal ethics anymore, so there is a great deal of advertising. Utah is a fairly small state with two law schools, so I think that may add to the percentage of lawyers practicing.

"Also, the economy in Utah has been soft at least we're led to believe it has been.

"My personal opinion is that Utahns tend to be very entrepreneurial, and anyone who starts their own business runs a good chance of winding up in bankruptcy court."

Stillgebauer said a comparison of the numbers of businesses that file bankruptcies compared to individuals paints a deceptive picture in that regard. Many individuals who have some sort of business file a personal bankruptcy petition. "They just carry those business debts over to the personal filing."

Kent Moon, director of the Small Business Administration's Salt Lake office, agreed that Utahns are more small-business oriented than some other areas of the country. He said about 99 percent of Utah businesses have fewer than 500 employees, and those companies employ 87 percent of the work force.

"Small businesses are definitely more dynamic than large corporations. They're the quickest to respond to a market opportunity, but also the quickest to display the impacts of an economic downturn."

But Moon believes the increasing numbers are deceptive to the general public, because for many years bankruptcy was synonymous with liquidation.

"The new bankruptcy laws, which were established in the late 1970s, were put in place to increase the potential for working out debtor and creditor disputes. Consequently, what has evolved is a tremendous increase in the number of filings, but many of those are businesses who reorganize their debt and continue on in business."

Yet the majority of filings in Utah are Chapter 7, or liquidation, petitions. Statistics show that during each of the past five years, the number of liquidation petitions filed was nearly double the number of Chapter 13 reorganization filings.

Chapter 13 is used by individuals and some one-owner businesses that, despite their debts, have the potential to reorganize their affairs and pay much of what they owe through a court-approved repayment plan. Individuals who don't meet the federal guidelines for filing a Chapter 13 usually file a Chapter 7.

Reorganization is becoming an increasingly popular option among debtors. In 1980, only 209 cases of Chapter 13 were filed in Utah. By 1987, the number had grown to 2,148 an increase of more than 1,000 percent.

"Many people are upset when people file a 13, but the law is there, and there are many valid reasons for it," Stillgebauer said. He cited such unforeseen circumstances as huge medical expenses and extended unemployment as examples.

Federal law governs what property is exempt from being sold or repossessed in a bankruptcy proceeding, and some states have their own specific exemptions. In Utah, Stillgebauer said, the exemptions in most cases include a home, a vehicle and necessary household goods. "Even color TVs and VCRs are no longer considered luxury items to a large extent. As society changes as to what the average person has, so does the idea of what is necessary to operate a household."

Even so, Stillgebauer said Utah's exemptions are probably more stringent than those in many other states. "Relatively speaking, the cost of living here is low, and the exemptions reflect that."

No matter what the circumstances, there is an established priority list of who is paid first from any non-exempt assets in a bankruptcy case. Stillgebauer said administrative expenses including attorney and trustee fees are the first priority. Taxing authorities come next, followed by secured creditors. Unsecured creditors are at the bottom of the priority list.

While some creditors view bankruptcy as a way for those who file to avoid paying their debts, Stillgebauer disputes that notion. He views it as a way for individuals and businesses to start over. "Debts are discharged or forgiven in bankruptcy, and it provides the debtor with a fresh start and an equitable distribution of the assets, if there are any."

And creditors can file adversary proceedings if they don't believe their debt is dischargeable. There are also laws to protect creditors from debtors who abuse the system. For instance, Stillgebauer said, individuals who file bankruptcy can't be out using credit cards to purchase luxury items for a certain number of days before the petition is filed.