By JODI SOKOLOWSKI
Buffalo Law Journal

Although bankruptcy filings rose 38 percent nationwide in 2007, filings in Western New York grew at a slower pace, rising by slightly less than 26 percent last year.

"We're seeing some increase, but it's very marginal in the numbers. Our numbers are basically staying stable," said Hon. Carl Bucki, chief judge of U.S. Bankruptcy Court for the Western District of New York.

Filings are slowly returning to levels seen before the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 took effect, spurring a record number of filings, followed by a 76 percent drop in filings nationally. Local statistics are taking longer to return to normal levels, Bucki said.

That may be because Western New York is somewhat insulated from national economic downturns or that local property values haven't skyrocketed, then plummeted, as has happened in other regions.

"Does that mean other parts of the country are hurting bad and we're not quite there yet? I don't know how to interpret that yet," Bucki said.

Comparing March 2007's 804 filings to the 777 from this past March, the region is actually seeing a decrease in filings.

"In three months now, we could be talking something different," said Mark Wallack, a trustee who handles Chapter 7 cases.

He said it's "odd" that filings in the region aren't keeping pace with those in the rest of the nation, but that may change with an impending recession.

Trustee Thomas Gaffney sees the rising cost of gas, food and utilities, along with pay scales that have not kept up with inflation, making a significant local impact already.

"Everyone in Western New York, for the most part, is living paycheck to paycheck," he said. "Any burp of an emergency, illness or job loss, and you can't make it up."

A sharp increase in minimum payments instituted by most credit lenders is also hitting consumers' wallets, said Thomas Feron, a bankruptcy attorney with Jeffrey Freedman Attorneys at Law.

"They are riding such a fine line that if they miss one payment, the rate jumps from 3 percent to 23 percent. It's just enough to tip that scale. They start to slide and can't stop," he said.

A recession may cause the bankruptcy filings to creep up faster.

"Recession is music to a bankruptcy attorney's ears," Gaffney said.