Personal bankruptcy filings drop 14% in state

Bankruptcy filings in Connecticut are on the wane, according to numbers released Thursday in The Commercial Record.

The fourth quarter of last year was the slowest period for personal bankruptcies in 2011, the publication said. Fewer than 1,800 Chapter 7 bankruptcy petitions - the most common type - were filed in the last quarter of the year, compared with more than 2,300 in the same period of 2010.

For the year, Connecticut personal bankruptcy filings fell 14 percent, according to The Warren Group, the Boston-based company that publishes The Commercial Record. Filers last year numbered 9,571 statewide, down from 11,105 the previous year.

"I'm encouraged by the drop in bankruptcy filings," said Timothy M. Warren Jr., chief executive of The Warren Group. "It indicates that consumers are more optimistic about their ability to pay off debt."

Chapter 7 bankruptcy, in which most debts are discharged after certain assets are sold off, was by far the most popular choice, accounting for 89 percent of state filings last year. Chapter 7 filings in the state fell to 8,518, compared with 9,887 in the previous year.

Chapter 13 bankruptcy filings, in which debt is paid off over a three- to five-year period, also decreased, from 1,087 two years ago to 934 last year. Chapter 11 business bankruptcy and restructuring filings also fell, from 131 to 119.

Fourth-quarter filings represented only 21 percent of the bankruptcies throughout the year. The second quarter of 2011 had the highest number of filings, about 30 percent of all bankruptcies.

"The decrease in bankruptcy filings is running parallel with lower unemployment rates in Connecticut," Warren said. "Unfortunately, I haven't seen a big enough improvement in the employment picture to confidently say the economy has completely turned the corner."