According to the U.S. Bankruptcy Court in New York, bankruptcies filed in Buffalo and Rochester fell 15.8% since April of 2010. In a 17 county area, they continued to fall in Western New York for the 11th straight month. Some say, “The reduction in bankruptcies has been driven, in part, by a slowdown in mortgage foreclosures and less credit available for borrowers to get into trouble. That means the reasons for the drop have more to do with the secondary effects of the recession than with actual economic improvement.”
Basically, two areas in the current recession have been more responsible for driving people to bankruptcy- foreclosures and credit card abuse. The housing crisis caused a record number of foreclosures, but they have slowed considerably in the past year, partly because of the national controversy over “robo” signing and partly because of a glut in housing inventories.
The state of New York requires borrowers and creditors to meet in a settlement conference to try to work out a loan modification before a foreclosure can proceed. Settlement conferences have been particularly successful in places like Western New York, alleviating the threat of foreclosure.
Credit card abuse was rampant at the beginning of the recession when jobs were suddenly lost, and credit card companies shut down the availability of credit, especially to the less credit worthy. The banks used several methods to reduce credit including: reducing the marketing of new credit cards, denying new applicants, cancelling cards, and reducing credit lines. These actions stopped borrowers from accumulating debt. In addition, people with good credit cut back on their spending in response to the shaky economy.
Whether the economy is beginning to recover or not, bankruptcies are on the decline in Western New York. This area of the country, although economically wounded, was not hit as hard by either the housing crisis or the recession as some other areas of the country.
Nevertheless, with bankruptcies declining, some in the area believe it might be a sign people are having fewer financial problems, getting into less financial trouble, and beginning to get their houses in order. That is good news, not only for people in Western New York, but for the people around the country.
Although bankruptcies are dropping in Western New York, bankruptcies continue to be very common. Filing for bankruptcy can protect both the creditor and the debtor and can allow an honest person or business to solve their financial crisis.
If you are still struggling with your finances due to the recent recession or a home foreclosure caused by the housing crisis, you have the right to file for bankruptcy protection.
Bankruptcy laws can be complicated, and you may need the legal expertise of a bankruptcy lawyer. If you need relief from the stress of debt and you live in or around the metropolitan areas of Buffalo, Rochester, or Niagara Falls, New York, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.
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