Utah may have one of the highest bankruptcy rates in the nation, but you can't blame the state's insolvency problems on members of the LDS Church, according to a new study.

In fact, members of The Church of Jesus Christ of Latter-day Saints fare slightly better than the general population when it comes to filing for bankruptcy, a study published last week in the Suffolk University Law Review said.

The study was conducted by two Harvard Law School graduates — both LDS — and is the first report to address whether Latter-day Saints cause or contribute to Utah's elevated bankruptcy rate.

"Our findings show that all Utahns, including Mormons, are suffering from an enormous bankruptcy glut, but Mormons are not experiencing it any more than any other Utahn," the study said. "Our data reveal that in Utah non-Mormons are 4.6 percent more likely than their Mormon counterparts to find themselves in bankruptcy court."

The study said that in a group of 1,000 randomly selected LDS members in Utah, 11.6 would have been involved in a bankruptcy. "If a similar group of 1,000 non-Mormons were assembled, 12.1 would have been involved," the study said. "In other words, had Mormons filed at the same rate as the rest of the state, about 300 more Utahns would have gone bankrupt in 2004."

Some have suggested that Utah's high concentration of LDS Church members and high bankruptcy filing rate are linked to tithing, a practice by faithful LDS who give 10 percent of their income to the church.

Yet James Wright, co-author of the study and a Salt Lake City real estate attorney, said while Latter-day Saints make up approximately 62.4 percent of Utah's population, "our data show they constitute only 61.3 percent of debtors in bankruptcy."

Were the state's predominant religion driving bankruptcy rates, the percentage of Latter-day Saints filing would be much higher, about 70 to 80 percent, Wright said.

"If Mormons were causing bankruptcy in the state, you would expect to find that they were very much overrepresented in the bankruptcy court," Wright said. "It is clear that Mormons are not overrepresented, bottom line."

At one filing per 167.4 households, Utah fell to the 10th spot in personal bankruptcy filings among all 50 states and the District of Columbia for the 12 months ended Dec. 31, 2006, according to a report earlier this year by the American Bankruptcy Institute, a Virginia-based research group.

From 2002 through 2004, Utah ranked first in the nation in households per filing.

Jeff Thredgold, president of Utah-based Thredgold Economic Associates and a consultant to Zions Bank, said while the percentage of LDS filers was smaller than the percentage of Latter-day Saints in the population, the survey sample is too small and the differences are insignificant.

"In order to make a really definitive statement about the connection between bankruptcy and religious affiliation you need probably a larger sample size," Thredgold said. "If a typical Mormon family is paying tithing, by definition there are dollars leaving the household that could have been used for debt service or different things. So you could make a case that paying tithing, at least on the surface, could contribute to higher levels of bankruptcy or delinquency."

The study was based on 281 surveys conducted in August 2004. Debtors received questionnaires when they appeared at a mandatory meeting of creditors. Survey questions asked a debtor's religion, level of religious devotion and donations to charity.

Ezekial Johnson, co-author of the study and a securities attorney in Chicago, said the study was prompted by numerous media accounts that implied that the LDS Church and the LDS culture may affect Utah's bankruptcy rate.

"This offered an opportunity to answer a question that hadn't been directly asked yet," Johnson said. "That's what my interest was."

In addition, the report found that while children significantly increased the chances for filing bankruptcy, in Utah the increase was less severe.

"Nationally there is about a 300 percent increased chance for filing bankruptcy if you have children than if you have no children," Wright said. "We found in Utah that there is only about 190 percent increased chance for people filing bankruptcy that have kids versus those that don't."

Johnson and Wright said their study does not definitively answer the question as to why Utah bankruptcy filings are higher than the national average. Nationally, people who file for bankruptcy do so in most cases for one of three reasons: divorce, job loss or catastrophic medical costs, according to ABI.

"It's very likely that it is a combination," Johnson said. "The contribution of our paper is hopefully we have eliminated one."


E-mail: danderton@desnews.com