This is an archived article that was published on in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

The number of Utahns who filed for bankruptcy fell 13 percent during the first half of 2012.

U.S. Bankruptcy Court for Utah Clerk David Sime said the court received 8,647 bankruptcy petitions during the first six months of the year, down from the 9,927 filings submitted during the first half of 2011.

The drop in filings puts the state on course for the first significant annual decline in Utahns declaring themselves insolvent since 2005, the year Congress passed bankruptcy-reform legislation that brought a sharp decline in filings nationwide the next year.

Since then, however, the number of U.S. bankruptcies have risen, approaching pre-2005 levels.

Filings nationwide have also decreased, with filings declining 14 percent for the U.S. as a whole in the first half of 2012, in a trend attributed to low interest rates and weak consumer spending.

"We are on pace for perhaps the lowest total new bankruptcies since before the financial crisis in 2008," said Samuel J. Gerdano, executive director of the American Bankruptcy Institute (ABI), a nonprofit Virginia-based research organization that tracks insolvency filings and related issues.

He said the ABI is anticipating that bankruptcy filings will remain at relatively low levels through the end of 2012.

But Jean Lown, a professor of Family, Consumer and Human Development at Utah State University who has studied the reasons Utahns seek bankruptcy-court protection from creditors, said the recent decline in filings may be only a temporary respite.

"Our [home] foreclosure rate remains high, which also suggests that there may still be many families who are living in their homes but not making the monthly mortgage payments," Lown said. "There may be a lot more people in terrible financial shape, but they just haven't felt the full impact of it yet."

Despite the first half decline, Utah bankruptcy numbers remain extraordinarily high, with the state claiming the fourth highest filing rate per capita in the country — 6.12 petitions for every 1,000 residents.

The average nationwide per capita bankruptcy filing rate for the first six months of 2012 was 4.08 petitions for every 1,000 people, according to the ABI.

Of the 8,647 Utahns who sought bankruptcy so far in 2012, 32 percent filed for Chapter 13, according to the U.S. Bankruptcy Court for Utah. Chapter 13 gives consumers — typically wage earners — the opportunity to formulate a plan for repaying their obligations over time.

The remaining 68 percent filed for Chapter 7, which involves a trustee liquidating a debtor's assets and distributing the proceeds to creditors.