The U.S. Bankruptcy Court for Utah reported Tuesday it received 1,964 bankruptcy petitions during the first quarter, a sharp 44 percent increase from the same three-month period a year earlier.

Included in that number were 20 Chapter 11 petitions filed primarily by businesses that have run into economic problems and are hoping to reorganize their debts.

"So far this year, through the first week in April, we've had 26 Chapter 11 petitions filed," said David Sime, clerk of the U.S. Bankruptcy Court for Utah. "That is more than we had in all of last year."

Utah isn't alone in seeing increases in the number of those seeking debt relief through the bankruptcy courts. U.S. individual bankruptcy filings increased 27 percent nationwide in the first quarter, according to the American Bankruptcy Institute.

"Bankruptcies are rising due to the heavy burden of household debt and growing mortgage problems," said Samuel Gerdano, the institute's executive director. "We expect the trend to continue through 2008."

Last year, Utah's bankruptcy numbers were lagging the rest of the nation. They increased 25 percent from 2006, while nationwide the increase was 40 percent. "It looks now as if we might be playing a little catch-up with the rest of the country," Sime said.

Bankruptcy filings nationwide plummeted in 2005 after Congress adopted reform legislation designed to make it more difficult for consumers to avoid paying their debts. The law established a means test to determine if those who filed could afford to pay at least 25 percent of what they owed, or a minimum of $6,000 over a five-year period. Those who could had to file for a Chapter 13 reorganization and make payments rather than get immediate relief under a Chapter 7 liquidation of their assets.

Kevin Anderson, a Chapter 13 trustee in Utah, said he has seen a significant increase in the number of Chapter 13 filings as a result.

In 2005, just 24 percent of individuals who filed for bankruptcy in Utah sought a Chapter 13, a type of bankruptcy that allows filers to set up a plan supervised by a court-appointed trustee to repay all or part of their debts, typically over a three-to-five-year period.

So far this year, 46 percent of the bankruptcy petitions filed in Utah sought Chapter 13.

"Those debtors who are filing under Chapter 13 seem more committed to successfully completing their plans than in the past," Anderson said. "So from that perspective, the [reform] legislation has been successful."

Still, the primary reasons Utahns have filed for bankruptcy - the loss of a job, divorce or unexpected medical bills - haven't changed.

Anderson pointed out there also hasn't been any significant change in the financial situations of most Utahns. And that led him and other experts to predict three years ago that the decline in bankruptcy numbers in the wake of Congress' adoption of the 2005 reform legislation was only temporary.

"Over the past several years, home values in Utah allowed a lot of people to borrow their way out of [financial] trouble," he said. "With home values now either stagnant or starting to go down, it really was only a question of time before filings would go back up."

Kelly Matthews, executive vice president and economist for Wells Fargo's intermountain region, agreed that much of the increase in bankruptcy the state is experiencing is the result of problems in the housing market.

"We certainly shouldn't be seeing any huge impact [on bankruptcy numbers] from employment weakness because that is just not a problem here. As far as the housing market goes, that is just something we're going to have to work our way through," Matthews said.

steve@sltrib.com