In a bit of good news for South Carolina residents, a state hit hard by the recession, according to a recent analysis for the National Bankruptcy Research Center, 2011 saw about 12 percent fewer personal bankruptcy filings than 2010. While 2010 saw around 1.5 million bankruptcies, for a rate of about 1 filing for every 150 Americans, 2011 had approximately 1.35 million personal bankruptcies, for a rate of around 1 filing for every 175 Americans.

Charleston, South Carolina, saw the second-lowest bankruptcy filing rate among the United States' urban counties. Apart from one exception, no U.S. states saw any noteworthy increases in bankrupticies. The highest-ranking state in the study, Nevada, saw 1 bankruptcy for every 88 individuals. Despite a 20 percent drop in filings since 2010, the state still had twice as many filings as the national average.

According to the study's author, this marks the first decrease in nationwide bankruptcy filings since 2006. In the first half of 2011, Chapter 13 bankruptcy filings were down 25 percent from the same period in 2010, while Chapter 7 filings were down 17 percent. Chapter 7 bankruptcy allows filers to sell their assets, using the proceeds to pay their debts, while Chapter 13 bankruptcy lets those with regular income adjust their debts in accordance with new repayment plans.

The report's author said that while filings decreased by a significant amount in 2011, it would be unwise to draw too many conclusions from the data. He explained that there was a slight uptick in filings in November and December 2011, which could mean that filings could be on the rise for 2012.

But for South Carolina residents who do still need to file for bankruptcy protection, it should not be seen as a stigma. Bankruptcy protection exists to give people a second chance at a strong financial future.

Source: Columbia Law School, "Personal Bankruptcy Filings Down 12 Percent in 2011, Says Law Professor," Jan. 5, 2012