BUFFALO, N.Y. (WIVB) – Bankruptcies filed in the U.S. Bankruptcy Courts across Western New York are on the rise, so far in 2017, which might be surprising, because of Buffalo’s economic resurgence.
Bankruptcy filings in Buffalo have been steadily falling over the past 7 years, but so far in 2017, they are up by about two-and-a-half percent–for the month of July, they were up by 24%.
It might seem counter intuitive, but attorney Chris Grover of Jeffrey Freedman Attorneys in Buffalo said personal bankruptcies generally rise and fall with the economy: when the going is good, bankruptcies increase, times are not so good the filings fall off.
“When the economy is up, creditors are more willing to extend credit, and then you do have people who can over extend themselves, and then when something happens–when there is a divorce or an illness–they are over extended to the point where they do end up needing a bankruptcy.”
Despite the progress Buffalo and Western New York are making with hundreds of new jobs being created, and unemployment the lowest it has been in years, there are still hundreds of people in financial distress.
Many of those consumers are turning to Consumer Credit Counseling Service of Buffalo, prior to filing bankruptcy, and credit counselor Noelle Carter said their numbers for 2017 are also up, by about 7%.
Carter said with an improved economy, consumers’ income might be better, but they are not fixing their debt problems.
“Your debt balances may be astronomically higher than what they were several years ago when you stopped making payments on them.”
Many consumers might not have been able to afford to file in bankruptcy court, but Carter said, with their finances improving, those consumers can file for bankruptcy now, and lighten their debt load.
“Incomes stabilize, people are finding work, so now they are in a position where they are able to do something about their debt, even if it is filing bankruptcy.”
Is this rise in bankruptcy filings a reason for concern, or just an anomaly? Carter and Grover said, we will just have watch a few more cycles to find out.