Bankruptcy filings have been on the rise for years due to the bad economy and the failure of the housing market. The typical reasons that lead people to file for Chapter 7 bankruptcy protection are still having their effect on people, but now more than ever. These reasons include unexpected medical bills, divorce and extended unemployment.

Last year, bankruptcy filings were at their highest since bankruptcy laws changed in 2005. That year, filings were up as people who feared they might not qualify for bankruptcy under the new rules rushed to file under the old rules.

Comparisons of bankruptcy filings in the first quarter of 2011 to the same period in 2010 show that filings have fallen six percent overall. Some observers say that this may be attributable to people doing a better job of maintaining only the amount of debt that they can handle.

U.S. consumer credit outstanding has fallen to $2.41 trillion in January from $2.57 trillion two years earlier, as shown in Federal Reserve data.

In 2010, there were 363,215 consumer bankruptcy filings in January, February and March. In 2011 there have been 340,012 in the same quarter. The numbers were reported by the American Bankruptcy Institute, and they were collected by the National Bankruptcy Research Center.

Looking at month-over-month comparisons, March 2011 filings (144,657) were up 41 percent over February 2011 (102,686), but down 3 percent over the March 2010 filings (149,268).

The ABI is predicting that filings will be down overall in 2011 compared to 2010, when there were 1.53 million consumer bankruptcies.

Source: Westlaw News & Insight "U.S. consumer bankruptcies down 6 percent in Q1" 4/5/2011