Bankruptcy filings fell nearly 12 percent in 2011 from the year before, according to statistics from Epiq Systems, which tracks the data.

There were roughly 1.4 million bankruptcy filings last year, according to a post on the Credit Slips blog about the statistics by Robert Lawless, a professor at the University of Illinois College of Law and an authority on bankruptcy. The full year numbers continue a trend that was clear last summer.

The vast majority of the filings — about 70 percent — are Chapter 7 bankruptcies, which allow individuals to avoid repaying their debts if they pass a means test. Roughly another third are Chapter 13 filings, under which filers must pay back a portion of their debts over three to five years.

Declines have been seen in both Chapter 7 and Chapter 13 bankruptcies, with a slightly larger decline in Chapter 7, according to Professor Lawless, who analyzed the Epiq data as supplied to the Bankruptcy Data Project at Harvard.

The daily bankruptcy rate in December was 4,584, also a 12 percent decline on a year-over-year basis.

The decline in bankruptcies, though, doesn’t necessarily reflect an improvement in the economy. Professor Lawless said in an interview that consumer bankruptcy filings are typically a function of access to credit. If consumers are having trouble paying bills, but they can put spending on a credit card, they are typically able to forgo filing for bankruptcy.

The Federal Reserve reported this week that consumer borrowing rose substantially in November, suggesting that people were able to use credit more easily than in recent years.

Professor Lawless said he suspected that bankruptcies would continue to decline in the coming year, but said he would have to do more analysis on that hypothesis.

Have you considered filing for bankruptcy protection?

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