Bay State bankruptcies fall
Filings declined 8% in 3d quarter
Bankruptcies, which have steadily climbed in Massachusetts over the past two years, showed an unexpected decline last quarter.
The total number of bankruptcies in the state fell 8 percent in the third quarter to 5,025, down from 5,472 in the previous quarter, according to data collected by Warren Group, a Boston company that tracks local real estate and economic data.
Timothy M. Warren Jr., chief executive of Warren Group, theorized that some Massachusetts residents having financial difficulties may not be as desperate as they once were, because they are optimistic that the economy is recovering. The Dow Jones industrial average surpassed 10,000 Wednesday for the first time in a year, and the housing market has shown signs of improvement in recent months.
“People sitting around the dinner table [might be saying] they will be able to stick it out and not go the bankruptcy route,’’ Warren said.
But the level of bankruptcies still remains relatively high as thousands of residents - many of whom have been out of work for extended periods and may have exhausted their unemployment benefits - continue to have difficulty keeping up with mortgage payments and other bills.
The number of Massachusetts bankruptcies in the third quarter was up 25 percent compared with the same quarter a year ago, and the rate was 48 percent higher compared with the third quarter in 2007.
Through the first nine months of this year, the number of bankruptcies climbed 19 percent compared with last year.
The increases have been sharpest for Chapter 7 bankruptcy filings, in which consumers and companies can liquidate their debts instead of trying to work out repayment plans. The shift is an indication those people who do file for bankruptcy may be deeper in debt or have less income to repay their bills. Individuals are generally prevented from filing for Chapter 7 protection if their income is too high.
The data include both corporate and individual bankruptcies, but individuals account for the vast majority of bankruptcy filings. Also included are the three most common types of bankruptcy: Chapter 7, Chapter 11, and Chapter 13.
Todd Wallack can be reached at twallack@globe.com. 
