During the first three months of this year, 1,361 Utahns sought protection from their creditors in the U.S. Bankruptcy Court for Utah, a 34 increase over the 1,015 bankruptcy petitions filed during the first quarter of 2006.

"If you look at the number of people who filed in March - 593 - that was more than we saw in any single month in 2006," said David Sime, clerk of the U.S. Bankruptcy Court for Utah. "It could be an indication that our numbers will be picking back up."

The number of bankruptcies plunged in Utah and the rest of the nation in late 2005 after Congress adopted the Bankruptcy Abuse Prevention and Consumer Protection Act. The new law, which went into effect in October of that year, was designed to make it harder for consumers to walk away from their debts.

As a result, thousands of Utahns flooded into the U.S. Bankruptcy Court in order to file before the new law went into effect - a development that resulted in the dramatic 77 percent drop in filings the following year.

Still, many experts believed that decline was only a temporary respite for Utah, which has in the past had the highest bankruptcy filings per household in the nation.

"If you look at the underlying reasons people file for bankruptcy things haven't changed one iota," said Jean Lown, a professor at Utah State University who has studied the reasons behind Utah's consumer bankruptcy rate.

So it's no surprise that the bankruptcy rate appears to be going back up again.

Bill Crim of the United Way of Salt Lake City, which completed a study last year on the reasons why Utahns file for bankruptcy, said the new federal law only addressed one of the causes of bankruptcy: poor financial decision making that results in overspending.

"It didn't address any of the other causes such as rising health care costs, rising housing costs or the inability of families to save for the future," he said.

One of the goals of the new bankruptcy law, however, was to encourage consumers who had the wherewithal to pay at least a portion of their debts to file for Chapter 13 bankruptcy instead of a Chapter 7.

Early indications are that in Utah, at least, that objective is within reach.

Of the 1,361 Utahns who filed for bankruptcy in the first quarter of this year, 43 percent filed for Chapter 13, which allows them under the supervision of a court appointed trustee to formulate a plan to repay their debts over time, typically three to five years.

Only 24 percent of Utahns who submitted bankruptcy in 2005 filed for Chapter 13.

"My sense is that people who now are filing for Chapter 13 are making a greater effort to make sure that they are successful in completing their [repayment] plans," said Kevin Anderson, a Chapter 13 trustee in Salt Lake City.

steve@sltrib.com