September 2011 saw a continued slowing in personal bankruptcy filings as fewer United States citizens took advantage of their right to bankruptcy protection. This was according to reports from the American Bankruptcy Institute and the National Bankruptcy Research Center.

September filings fell 17 percent to 108,517 compared to September, 2010. To date, 2011 personal bankruptcy filings are 10 percent lower than for the first 9 months of 2010. September 2011 filings were also 4 percent lower than for August, but, the numbers are raw and have not yet been adjusted for seasonal fluctuations.

According to the executive director of The Bankruptcy Institute, the drop in the number of bankruptcy filings has been due to consumers spending less and accumulating less debt. Also contributing to the lessening of debt is the fact that credit is less available to consumers than it has been in the past.

San Diego bankruptcy attorneys have noted that the number of bankruptcy filings in 2010 was over 1.5 million. That was the most bankruptcy filings in any year since 2005, when Congress passed laws making it more difficult for people to qualify for some forms of bankruptcy. While the period immediately following the new law's passage saw a marked decrease in bankruptcy filings, they resumed climbing as the Great Recession took root.

One of the aims of the 2005 bankruptcy reforms was to direct more people into Chapter 13 bankruptcy reorganization. However, recent data shows that only around 30 percent of those filing for bankruptcy choose Chapter 13. Most individual filers still opt for Chapter 7, which discharges most debts but also includes a liquidation of non-exempt assets.

Source: Real Time Economics "Personal Bankruptcies Decline" Oct. 4, 2011