Overcoming debt has been a serious problem for many Pennsylvania residents since the recession began in 2008. But the number of people who have lost their homes or have had to file for bankruptcy has decreased over the past couple of years. According to the United States Bankruptcy Court for the Western District of Pennsylvania, bankruptcy filings in that region fell from 13,552 in 2009 to 13,117 in 2010.

There were 843 bankruptcies filed in October in Western Pennsylvania compared to 1,058 bankruptcy filings at the same point in 2010. This coincides with a nationwide decline in consumer bankruptcy filings. According to the American Bankruptcy Institute, the first 10 months of 2011 saw the number of consumer bankruptcy filings in the United States decrease 11 percent during the same period in the previous year.

Nevertheless, many bankruptcy attorneys point out that the numbers do not necessarily indicate a regional economic recovery. They say the declining numbers for bankruptcy and foreclosures have to do with the fact that the government is pushing banks to modify loans and has extended unemployment benefits. Additionally, creditors are working with consumers in an unprecedented way; and consumers are doing their part by reducing spending and pulling back on credit.

As the economy continues to lumber along in a years-long recession, consumers and creditors will probably have to demonstrate even more flexibility. The reports cited above suggest that the efforts by government and financial institutions to help persons struggling with debt have resulted in some successes. However, not everyone's circumstances are the same. Moreover, bankruptcy may still be of great benefit for many Pennsylvania families. It is therefore important that persons pursue the right strategy for dealing with the particular conditions of their debt.

Source: The Pittsburgh Post-Gazette, "Lowdown on debt: Foreclosures- bankruptcies are down- but that's not necessarily a sign of an improving economy," Tim Grant, Dec. 4, 2011