The trial, to hear the first of several lawsuits against the diocese dealing with sex-abuse allegations, is set to begin Nov. 1. The diocese had pleaded for one more month to negotiate with its insurance company and lawyers for 38 men who say they were abused by priests when they were minors.

But District Judge C.H. Pelton found that church officials did not have a solid reason for asking for more time in the case, which was filed 17 months ago.

Church officials say they do not intend to go to trial, but don't want the settlement with alleged victims to exhaust their assets, limiting payments to those who may step forward in a second wave of claims.

Without time to work out a more favorable settlement, Bishop William Franklin has said the only option would be to file for Chapter 11 bankruptcy, and warned the move could come as early as Friday.

"Frankly if we can't settle these, the bishop most likely will be filing" for bankruptcy, said Robert McMonagle, a lawyer for the diocese, said after the ruling came out. "Time is running very short."

The filing would make the diocese the third in the country to take that step in the wake of the sexual abuse crisis in the church. The Archdiocese of Portland, Ore., became the first in July, and the Diocese of Tucson, Ariz., filed in September.

David Clohessy, director of the Survivors Network of those Abused by Priests, said Franklin should consider other options.

"I suspect that the bishop will try to shift blame for his choosing bankruptcy and continue pointing the finger at others -- insurance companies, the judge, the victims," he said. "The bottom line is clear: The decision to file for bankruptcy is his and his alone."

A bankruptcy filing would open diocesan records up to unprecedented public scrutiny while officials craft a plan to restructure the diocese and compensate alleged victims, whose lawsuits would be frozen.

In a letter to the diocese's 102,000 parishioners, Franklin said the diocese would continue its ministry and programs while under bankruptcy protection. But he warned of a major downsizing that would include staff layoffs and the sale of a retirement home for priests.