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Declining bankruptcy filings mask the problems faced by debtors

Buffalo, NY — According to numbers provided by the U.S. Bankruptcy Court Western District of New York, consumer bankruptcy filings for August 2014 decreased 21.3 percent in the District as a whole, 27.3 percent for the greater Buffalo area, and 8.4 percent for the greater Rochester area. (Filings according to PACER data as of 9/3/14) Nationwide, consumer filings in July 2014 (most recent available), dropped 12 percent drop from the same period last year.

“The economy is improving and unemployment has dropped, but that doesn’t mean people aren’t struggling with debt,” said Christopher J. Grover, attorney, Jeffrey Freedman Attorneys, PLLC.  “Many people have student loans, medical debt, or credit cards that accumulated while they weren’t working and couldn’t pay their living expenses.”

Student loan debt has become a big concern for attorneys who handle bankruptcy, because it is affecting several generations of borrowers.  The total amount of student loans in the United States — more than $1 trillion — now tops credit card debt.

“Student loan debt cannot be discharged in bankruptcy and it creates ripple effects throughout our economy,” said Jeffrey Freedman, senior attorney, Jeffrey Freedman Attorneys, PLLC.

“Young people who should be buying houses and starting families are postponing those commitments because they are struggling with large monthly payments on student loans.  Retired folks are finding their Social Security checks don’t cover as much of their living expenses because they have student loans they took out when they changed careers later in life, or they’re paying for loans they co-signed for their children.”

The National Association of Consumer Bankruptcy Attorneys is advocating with Congress and the Consumer Financial Protection Bureau to change the laws to provide some relief from student loan debt under the bankruptcy code.