Falling bankruptcies may be result of improved lending regulation, credit availability

Personal bankruptcies in Western Pennsylvania and nationwide have steadily fallen for the past four years, which may better underscore the impact of tightened regulations and credit availability rather than improved economic conditions.

Bankruptcies filed in Western Pennsylvania, including Pittsburgh, Johnstown and Erie, fell 49 percent between 2009 and 2013. For the first six months of 2014, there were 3,870 filings, compared to 4,156 during the same period last year, reflecting a seven percent decline, the Pittsburgh Post-Gazette reports.

Across the nation, bankruptcy filings are down 14 percent from just over one million during the year ending March 2014, compared to 1.2 million bankruptcy filings over the same time period in 2009.

"Bankruptcy filings continue to dive as business borrowers enjoy sustained low interest rates and consumers remain committed to shedding debt," Samuel Gerdano, the executive director of the American Bankruptcy Institute, said, according to the Pittsburgh Post-Gazette.

Pittsburgh bankruptcy attorney Matthew Herron of Debt Doctors said the drop-off could be the result of a change in lending regulations and increased credit availability and lending by banks.

"We tend to think the people who file for bankruptcy are irresponsible or they are the cause of all their problems," Herron said, the Pittsburgh Post-Gazette reports. "But people filing for bankruptcy is just part of doing business for banks. The banks understand these numbers, and they know if they wanted to bring bankruptcy number down to almost zero, they could stop bankruptcies almost completely."