U.S. Bankruptcy Court Clerk David Sime reported that the number of Utahns who declared themselves insolvent through Sept. 30 increased 23 percent compared to the number of petitioners who filed during the same period a year ago.

Yet even with that increase in bankruptcy filings, Utah still is doing pretty well relative to many other areas of the country, Sime said.

Utah's bankruptcy numbers remain well behind the levels experienced prior to adoption of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which initially resulted in a sharp decline in the number of bankruptcies filed nationwide.

"There are some other areas of the country that are almost back to the levels they saw prior to the reform legislation taking effect," Sime said.

Although the 23 percent gain is significant - especially during a time when Utah's economy is said to be booming - it is far from a nine-month record. The record was set 10 years ago when 30 percent more Utahns than in the previous year sought relief from their creditors.

Bill Crim, director of strategic initiatives and public policy at the United Way of Salt Lake, said he still is worried. "We have a strong economy now by most measures, so to see bankruptcies increasing is cause for concern."

Crim in 2006 helped develop a United Way study titled, "Living on the Edge: Utahns' Perspectives on Bankruptcy and Financial Security," that found a large number of Utahns were unprepared to face any major short-term financial challenge.

And little has changed since then, Crim said.

The national bankruptcy reform legislation of 2005 failed to address many of the underlying causes that often result in families filing for bankruptcy, he said. Problems include a lack of financial literacy among consumers, low wages and health care and housing costs that are rising faster than take-home pay.

"Many Utah families continue to struggle," he said.

Of those Utahns who filed for bankruptcy in the first nine months of this year, 58 percent elected to walk away from most of their debts by filing for Chapter 7 protection. Under Chapter 7, most of a petition's property is liquidated and the proceeds distributed to those who are owed money.

By comparison, 62 percent of Utahns filing in the first nine months of 2006 sought Chapter 7 protection.

That means there was an increase this year in the percentage of Utahns who filed for Chapter 13, which allows individual consumers to set up a plan to repay at least part of their debts over time. Of the 4,633 petitions filed so far this year, 42 percent sought Chapter 13 compared to 38 percent a year ago.

steve@sltrib.com