Bankruptcy filings plunged last year in Massachusetts and nationwide as consumers continued to shun credit card debt and beefed up their savings.
Personal bankruptcies fell 18 percent in Massachusetts last year, according to Warren Group, the Boston company that publishes Banker & Tradesman. Including businesses, there were about 16,100 filings for bankruptcy protection in the state in 2012, down from more than 19,700 in 2011.
“It’s a sign of a recovering economy,” said Warren Group chief executive Timothy M. Warren Jr., noting that the real estate market has also stabilized and unemployment has gradually ebbed.
The Massachusetts figures reflect a national trend. Nationwide, bankruptcy filings fell by 14 percent last year to the lowest tally since 2008 financial crisis, according to data collected by the Epiq Systems Inc. for the American Bankruptcy Institute, a research group in Alexandria, Va.
Bankruptcy researchers say people are typically forced to file for bankruptcy when they take on too much debt and then are hit with an economic shock — whether it’s a serious illness, job loss, or divorce.
Filings often follow economic cycles. When the economy is running full-steam, banks tend to offer easy credit and consumers are more willing to take out loans. During the recent housing boom, for instance, many consumers bought pricey homes and borrowed money to renovate them or fill them with expensive goods.
But that all ground to a halt when the housing slump, financial crisis, and recession hit. Many banks tightened their purse strings and became leery about lending to consumers with imperfect credit.
Similarly, many consumers took steps to reduce their existing obligations and became wary about taking on new ones. Americans also started socking away more cash for a rainy day, reducing their vulnerability to the kind of economic shocks that tend to nudge people into bankruptcy.
Nationally, Americans saved about 3.6 percent of their disposable personal income in November, up from 2 percent when the recession began, according to the Commerce Department. The agency is expected to report new monthly figures next week.
Some analysts believe bankruptcies could eventually begin rising again as the economy continues to gradually improve and consumers feel comfortable taking on more debt — but it’s unclear when that might happen.
Samuel J. Gerdano, executive director of the American Bankruptcy Institute, recently predicted that bankruptcies will likely continue to fall in 2013 as consumers avoid taking on debt, remain careful about spending, and benefit from record low interest rates that reduce what they spend on home loans and other debts.