Bankruptcy filings in Buffalo plummeted in April and May from a year ago.

But don't be fooled by those numbers.

Experts say the declines more likely reflect a delay in filings, and they expect to see an increase in cases soon.

"I think there's a wave that's probably going to hit," said Raymond Fink, an attorney with Lippes Mathias Wexler Friedman.

In May, 124 bankruptcy cases were filed in Buffalo, down 53% from 264 a year ago, according to the U.S. Bankruptcy Court's Western District. In April, the number of cases filed in Buffalo was down 65% from a year earlier, to just 96.

Bankruptcy court has remained accessible for filings during the Covid-19 pandemic. But lawyers say the typical pace of filings was probably slowed by disruptions in the economy over the past two months.

With so many people following stay-at-home orders, people considering bankruptcy filings may have put off meeting with their lawyers,said Paul Pochepan, an attorney with HoganWillig.

Some of the legal actions that might ordinarily spur bankruptcy filings also have been on hold, such as the state's moratorium on certain types of foreclosures. Even some debt collectors have furloughed their workers, instead of making calls to pursue collection of debts.

"Some of the reasons people would be seeking out a bankruptcy attorney's help were temporarily, at least, put on hold," Pochepan said.

On top of what are essentially delayed cases are the new cases that could surface. Small businesses that have suffered financial trauma over the past two months might reach a breaking point. The federal government's Paycheck Protection Program has helped many of them endure and keep workers on the payroll, but that program spans just eight weeks. And business reopenings are just getting underway.

Pochepan said he is hopeful many small businesses will survive, but he recognizes what they are up against.

"Any of them that were sort of teetering before they lost that flow of income altogether, I can't imagine how we're not going to see more business [bankruptcy] filings," he said.

Nationally, some big names, including Pier 1 and JC Penney, have filed for bankruptcy, reflecting the pressures retailers are under.

Small businesses that file for bankruptcy have a new tool at their disposal.

The Small Business Reorganization Act, which took effect in February, is designed to help small businesses reorganize under Chapter 11 in a faster, less expensive manner, Fink said. A process that used to take a year or longer should now only take them 90 to 120 days.

The rest is here:

As economy reopens, wave of bankruptcy filings likely on the way - Buffalo News