In just three years, the number of consumer bankruptcy filings has plunged by 30 percent, with the biggest drop in filings coming from states hardest hit by the recession.
For the first quarter of 2013, filings dropped to fewer than 261,000 in the 50 states and District of Columbia. That's down 16 percent from the same period last year, according to statistics from Epiq Systems, which analyzes figures generated by the U.S. Bankruptcy Courts.
For the time being, "the number of filings will continue to level off," says Claire Ann Resop, a bankruptcy attorney and former Chapter 7 bankruptcy trustee in Madison, Wis. "So many people have already done it. At some point there's nobody left."
To see how your state ranks, view the chart below, which shows bankruptcies per capita in each state, and in each federal jurisdiction. Story continues below chart .
Worst-hit states recover
Some of the biggest declines in filings for the first quarter of the year came in Nevada and California, which were walloped by the recession, and had seen some of the highest filing rates in the nation. Both states had declines of almost 30 percent compared to last year.
Only a few states, including Alabama and Tennessee, had single-digit declines.
In raw numbers, California still led the rankings with the greatest number of filings, at more than 36,000 for the first quarter of 2013. It was followed by Florida, with more than 18,000, and Illinois, with more than 17,000.
Nevada, which once had outpaced any other state in terms of per-capita filings, continued to see its situation improve. For the first three months of 2013, Nevada ranked fifth in per-capita filings, with 5.03 for every 1,000 people. At its worst in 2009, the state had a per-capita filing rate of more than 11 per 1,000 residents.
Now Tennessee leads the list, with 6.7 filings per 1,000 residents, followed by Georgia, Alabama and Illinois, which all had more than 5 filings per 1,000 residents.
Economic threats lessen
Overall, bankruptcy filing rates have been declining since 2010. Staggering unemployment and tight consumer credit pushed filings to more than 376,000 for the first quarter of 2010 and nearly 1.55 million for the entire year. That was the highest number since bankruptcy laws were reformed in 2005.
In 2012, filings totaled less than 1.2 million, and for the fourth quarter of the year, credit card delinquency rates dropped to their lowest level in nearly two decades.
Only 2.47 percent of all credit card accounts were delinquent at that time, the lowest rate since the third quarter of 1994, according to the American Bankers Association.
Consumer reluctance to take on new debt no doubt has had an impact. In January, consumers owed nearly $851 billion in revolving debt, which is mostly comprised of credit card debt. In 2008, credit card debt topped $1 trillion.
Despite the bright spots, inquiries about bankruptcy continue to stream in. Steven Wieckowski, a bankruptcy counselor with the nonprofit consumer credit counseling service GreenPath Inc., says the majority of calls about bankruptcy come from those who have lost income due to a layoff, divorce or medical issue.
"I feel like I'm speaking to an increasing number of elderly folks," Wieckowski adds.
They could be having financial issues because a spouse who was still working has died, or their children used to assist them financially and can no longer afford to do so.
Those who come to Wieckowski for counseling typically have credit card debt of $20,000 to $25,000. "They've used their credit cards and gone on as long as they can."
Henry Hildebrand III, a Chapter 13 bankruptcy trustee based in Nashville, expects bankruptcy filings will climb again as homes continue to gain value and the employment rate gradually improves. In particular, there may be an upturn in Chapter 13 filings, which have declined in recent years and represented 30 percent of all filings in 2012.
Unlike a Chapter 7 filing, in which much of someone's property is sold and the proceeds used to wipe out most debts, consumers file under Chapter 13 in a bid to keep their assets, such as their homes and cars, by adhering to a repayment plan that lasts for up to five years.
For someone with wages coming in and a house worth more, "now there will be something to protect," Hildebrand says.
See related: Personal bankruptcies fell 14 percent in first three quarters of 2012 , What to say when you can't pay , How bankruptcy affects your FICO score
Juan Rodriguez contributed to this report.