Personal bankruptcy filings continue to decline - both in Minnesota and nationwide.

In Minnesota there were 1,490 filings during August, down 7 percent from August 2010. That brings the total filings year-to-date to 13,258, a nearly 12 percent decrease from the 15,022 filings through August last year.

Nationwide, 113,432 consumers filed for bankruptcy, an 11 percent decrease from the 127,028 consumer filings last August.

The American Bankruptcy Institute says data from the National Bankruptcy Research Center shows lower bankruptcies for each month this year compared to last year. The center expects 1.5 million fewer personal bankruptcy filings this year than last year.

Why the decline? Several possibilities, including:

  • while more households are receiving credit card offers, credit is still tight.
  • since the economic slowdown is years long, maybe a lot of families already filed; 2009 was a heavy year for filings.
  • maybe enough families have taken charge of their own debt payoff to not need the help of bankruptcy court. Consumer debt levels have been steadily decreasing.
  • a depressing possibility: families are still in deep, and holding their bankruptcy card until they see a light at the end of the tunnel. There's no point in discharging your debts if you're broke and jobless.

On the day that the government announced that August's unemployment rate remained at 9.1 percent, unchanged from July, I can't help but wonder if bankruptcy rates will climb once jobless families exhaust their safety net.

And may I throw out this thought to chew on? Are there families out there struggling to pay a mortgage for an underwater home they can't afford, or feed a family on a part time job, who should be filing for bankruptcy but don't because of the stigma?

Should the bankruptcy numbers be higher?