Bankruptcy Filings Declining in New York

June 22, 2012

Many people faced economic difficulties when the stock market collapsed in 2008. Those who lost their jobs and health insurance struggled to pay bills, and others found themselves underwater in their mortgages as the housing bubble burst and the values of their homes plummeted. Thousands in New York and across the country sought relief by filing bankruptcy. However, the latest statistics reveal that the number of people filing bankruptcy has been dropping.

Bankruptcy Filing Statistics

New York saw a decrease in the number of bankruptcy filings beginning in 2011. According to the American Bankruptcy Institute, the total number of filings in the state in 2011 was 49,056, down from 56,479 in 2010. New York's statistics mirrored national trends. The ABI reported that bankruptcy filings dropped 6 percent from the first quarter of 2011 from the same time in 2012.

A report by the Fitch Ratings revealed that the drop in bankruptcies continued into 2012. According to the report, bankruptcy filings for the first quarter of 2012 fell to 8 to 10 percent of the levels they were at during the first quarter of 2011. Experts predict that the levels will continue to fall throughout 2012.

Reasons for the Decrease

Experts suggest that the fall in bankruptcy filings demonstrates that consumers are more effectively managing their debts. However, others point out that credit card companies took steps to protect themselves by severely limiting people's access to credit, which may have also contributed to the decrease in bankruptcy filings. Credit card companies instituted much more stringent qualification requirements, rescinding cards from those with poor credit and not granting as many new cards to applicants.

Others point to the temporary slow-down in lenders foreclosing on homes as a result of the "robo-signing" scandal as a reason for the decline in bankruptcy filings. Without the immediate threat of losing their homes, fewer people felt compelled to seek bankruptcy protection.

Talk to an Attorney

While the number of people filing bankruptcy may be falling, many are still facing difficult financial situations while the economy struggles to recover. If you are overwhelmed by debt and are considering bankruptcy, consult with an experienced bankruptcy lawyer who can discuss your situation with you and advise you of your options.

Article provided by Nathan Erlich, P.C.
Visit us at http://www.erlichpc.com