Personal bankruptcies declined 2.5 percent in 2009 as the number of highly indebted borrowers fell by more than half in the past two years following a crackdown on lending practices among consumer lenders.

Personal bankruptcies fell to 126,265 cases from 129,508 a year earlier, according to data from the Supreme Court on Friday.

They have declined 48 percent from a peak of about 242,000 in 2003. The government introduced legislation in 2006 forcing lenders to cut interest rates and reduce loans after the Supreme Court ruled earlier that year that lenders had overcharged customers. Borrowers with problems repaying bank debts are also taking advantage of measures introduced in December by the government to urge banks to relax some terms.

"Individuals who were forced into bankruptcy after borrowing at high rates from consumer lenders are being turned away by lenders, so bankruptcies are down," said Hideo Kumano, an economist at Dai-ichi Life Research Institute. "Borrowers are getting relief from the government's new credit law, too."

The crackdown on lending practices has resulted in a decline in the number of borrowers with five or more loans from consumer lenders, falling 55 percent to 798,000 in December from a high of 1.8 million in February 2007, according to data from the Financial Services Agency.