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Bankruptcy filings fall 15.3 percent in May

By Matt Glynn | News Business Reporter
The Buffalo News

The drop in bankruptcy filings shows no sign of abating.

The number of cases filed in Buffalo and Rochester fell 15.3 percent in May, to 459, according to the U.S. Bankruptcy Court. Through the first five months of the year, the total was down 14 percent from the same period in 2013, to 2,145.

The May numbers were the latest in a long-standing trend. The last time there was an increase in year-over-year bankruptcy filings for Buffalo/Rochester was September 2013.

Experts say a few factors have contributed to the drop-off in bankruptcy filing, such as less free spending by consumers and tighter credit practices by lenders.

“The biggest thing I see is the lack of credit being extended to people,” said Jeffrey Freedman, a bankruptcy attorney based in Buffalo.

Freedman said the drop-off does not necessarily mean that people are not undergoing financial hardship. He noted that student loan debt, a financial burden for many, is not dischargeable in bankruptcy court.

And people considering filing for bankruptcy are now facing higher fees to do so, under changes that went into effect nationwide this month.

To put May’s numbers in perspective, the number of cases filed in May 2005 was more than three times higher. That was amid a run-up in filings before a change in bankruptcy laws later that year.

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