Decline in Bankruptcy Filings?

It was widely reported today that bankruptcy filings are declining. had a good overview of the data:

U.S. consumer bankruptcies continue to decline gradually but that doesn’t mean economic prosperity has returned to the economy, according to consumer bankruptcy lawyers.  U.S. consumer bankruptcy filings totaled 100,980 nationwide during November, a 12 percent decrease from the 114,587 total consumer filings recorded in November 2010, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC).
The November consumer filings also represented a 5 percent decrease from the 106,255 filings in October. Chapter 13 filings constituted 31 percent of all consumer cases in November, a slight decrease from October.

The question is why?

Consensus seems to focus on the fact that many people have become "judgment proof," meaning there are not assets or income for a creditor to take.  That will change if the economy gets better and more people will need bankruptcy protection.

Here is an interesting overview from NBKRC.

Bankruptcy filings fell slightly last month – down to 101,000 in November from 106,000 in October. The apparent decrease is slightly misleading, however, when we look at seasonal trends. Because November filings typically are quite low, this month’s filings actually increased 7% from October on a seasonally adjusted basis. Still, filings were down 12% from last November and filings to date this year are down 11% from the same time last year.

Nationwide, 2011 filings to date amount to about 5400 filings per million adults, or one in every 200.

California still has the fourth highest rate of filing in the nation.