Bankruptcy filings in Utah may be on the decline, but the state continues to hold the title of insolvency capital of the nation.

In 2003, one of every 36.6 Utah households filed for bankruptcy, the highest households per filing rate in the nation, according to the Virginia-based American Bankruptcy Institute. Utah's rate is nearly double the national rate of one filing per 73.1 households.

Tennessee took second place at one filing per 38.4 households. Georgia ranked third at one filing per 42.7. Alaska had the lowest rate, with one filing for every 189.3 households.

Habbo Fokkena, U.S. bankruptcy trustee for seven states, including Utah, said there are several factors that contribute to Utah's high number of filings.

"Utah has larger families. The families are younger than the national average," Fokkena said. "Your housing prices are somewhat higher than the national average, and your per capita income is somewhat lower than the national average. Nationwide, the vast overwhelming majority of bankruptcies are driven by credit-card debt."

Despite Utah's high filing rate, bankruptcies in the state have started to slow. Filings fell 0.6 percent from 2002 to 2003, the first time since 1994 that bankruptcies declined. For the first two months of 2004, filings are down 12.5 percent compared to the same period in 2003.

Nationally, bankruptcy filings in 2003 broke a record as some 1.7 million individuals turned to the courts to absolve their debts.

Elizabeth Warren, a Harvard Law School professor, recently told the Deseret Morning News that a family with children is nearly three times more likely to file for bankruptcy than a family with no children.

Warren predicts that by 2010 one in seven middle-class families with children in the United States will be bankrupt.

"This year (2003), more people will end up bankrupt than will suffer a heart attack," Warren writes in her book, "The Two Income Trap." "More adults will file for bankruptcy than will be diagnosed with cancer. More people will file for bankruptcy than will graduate from college. And, in an era when traditionalists decry the demise of the institution of marriage, Americans will file more petitions for bankruptcy than for divorce."

According to the Federal Reserve, U.S. consumer credit rose at an annual rate of 8.6 percent in January. Revolving debt, or credit card debt, in January reached $750 billion, up from $744.6 billion in December.

The Cambridge Consumer Credit Index reports that 42 percent of Americans are making only the minimum or no payments at all on their credit-card balances.

"The most profitable customer for credit-card companies is someone who is almost but not quite bankrupt," Warren told the Deseret Morning News. "The credit-card companies make almost no profit from me, because I pay my bill in full every month. But they make a lot of profit from my nephew, who is starting a young family. They make minimum monthly payments, and they're paying off at 16 percent interest."

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