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Bankruptcy filings decline by 17.6% locally. Nation sees 2.2 percent increase in November 2010

Posted: December 06, 2010

Buffalo, NY – Bankruptcy filings in the Western District of New York continued to decline in November; down 17.6 percent compared to November, 2009, according to the U.S. Bankruptcy Court. Nationally, the American Bankruptcy Institute reports consumer bankruptcy filings increased 2.2 percent in November compared to November, 2009. For the year-to-date (January through November), filings in Western New York have decreased 9.1 percent compared to the same period in 2009.

There are significant differences between the national economy and the economy here in WNY, according to Tom Ulbrich, director of the Center for Entrepreneurial Leadership at the University at Buffalo.

“In my opinion we’ve always been an area that is more financially conservative than other parts of the country -- and we were never part of the boom/bust that went on in other areas,” Ulbrich said. Ulbrich also pointed out that WNY no longer relies on one or two industries for employment, it has developed a diverse economy that has helped keep the area on an even keel. “The fact that filings are beginning to slow on the national level is a separate part of the picture,” said Jeffrey Freedman, senior partner, Jeffrey Freedman Attorneys at Law. “I believe that can be attributed to the fact consumers are pulling back on discretionary spending and the use of credit. And there’s no denying that overuse of credit is one of the contributing factors in bankruptcy.”

The Federal Reserve Bank of New York released its third quarter report on Household Debt and Credit this week, showing delinquencies on credit card payments were down by 8.2 percent compared to 2009. Total consumer debt has dropped by $1 trillion since the third quarter of 2008.

“The statistics clearly show that Americans are borrowing less and paying off more of their debt for the first time in this decade,” Freedman said. “Some of this behavior is the result of the tightening of our credit laws, but it is also the result of people being more responsible in the use of their credit.”

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