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Utah in 2012 saw its first significant annual decline in bankruptcy filings in more than six years as the state's improving economy appeared to be helping more people stay out of financial trouble.

Despite the lower numbers, though, many Utahns' hold on solvency is tenuous at best.

U.S. Bankruptcy Court for Utah Clerk David Sime reported that Utahns filed 16,263 bankruptcies last year, a 12 percent decline from 2011, and first drop since shortly after Congress revamped the nation's bankruptcy law in late 2005 to make it tougher for individuals to get relief from their debts.

"We started noticing bankruptcy filings beginning to go down in the final quarter of 2011," Sime said, noting the downward trend continued throughout 2012.

Despite the decline, Utah's numbers remain comparatively high nationally, with the state claiming the fifth-highest filings per capita during the year — 5.76 filings for every 1,000 residents, according to the American Bankruptcy Institute. Nationally, there were an average 3.86 bankruptcy filings for every 1,000 people.

Utah's declining numbers, though, tracked what happened nationally in 2012.

Total bankruptcy filings in the U.S. totaled 1.19 million for 2012, a 14 percent decrease from the 1.38 million during the previous year.

"The 2012 filings represent the lowest total since the financial crisis in 2008," said Samuel J. Gerdano, executive director of the American Bankruptcy Institute, a nonprofit, Virginia-based research organization that tracks insolvency filings and related issues.

Gerdano said he anticipates that bankruptcy filings will continue their downward trend in Utah and across the country in the year ahead. "With low interest rates and consumers reducing their spending and continuing to deleverage, bankruptcy filings likely will continue their decline in 2013," he said.

Bankruptcy court trustee Kevin Anderson, who administers many of the Chapter 13 bankruptcy filings in the state, attributes Utah's better showing at least partly to the state's relatively strong economy, which has produced one of the lowest rates of unemployment in the country.

"There is some correlation between the number of bankruptcy filings and the unemployment rate," Anderson said, noting that if Utah's economy continues to perform well the state could see bankruptcy filings level off. "But if gas prices go back up or the stock market goes down, we could see" the opposite.

The tenuous nature of many Utahns' financial lives is evident every day at the Utah Food Bank, said spokeswoman Ginette Bott.

"Things are a little different from our perspective. We distributed more food in 2012 than we did in the previous year."

Although she knows that more Utahns have gone back to work, she thinks that many have found jobs that pay far less than their previous employment.

"We see a lot of people whose standard of living has gone down drastically, and many who are only one step away from [financial] trouble. All it might take is a transmission going out on their car or maybe a kid breaks a leg and they don't have insurance."

Of the 16,263 bankruptcy petitions filed in Utah last year, Sime reported that 32 percent sought Chapter 13 — a type of bankruptcy that allows financially troubled consumers to formulate a plan to repay all, or at least part, of what they owe over a period of time, typically three to five years.

The remaining 68 percent, or 11,003 petitions, were for Chapter 7, which involves a trust liquidating a debtor's assets and distributing the proceeds to creditors. Any remaining debts are wiped out, and a debtor receives a fresh financial start. —

Considering filing for bankruptcy?

The U.S. Bankruptcy Court for Utah's website at offers answers to frequently asked questions. Click on the "Public Resources" tab to access the information.