Bankruptcies for 2020 are Low Now, But Will They Stay That Way?
In March 2019, there were 4% more bankruptcies than there are today—a year later. That may seem like good news on the surface, but keep in mind what’s going on in the world today. In the past several weeks, more than 16 million people have filed for unemployment due to the COVID-19 pandemic that’s sweeping the nation—and the world, for that matter.
Many Americans have no savings or other financial safety net to help them through such a crisis. As such, many households are struggling to put food on their tables. Americans aren’t getting much relief either. While President Donald Trump is trying to jumpstart the economy through the $2 trillion stimulus package, passed at the end of the March. While businesses will get a significant amount of help, individuals will only get up to $1,200 each—and that’s if they meet certain requirements.
That money will be a godsend to many, but it still won’t cover much. In many parts of the country, that won’t even cover a month of rent. So what will happen once savings accounts are depleted and credit cards are maxed out? People will file for bankruptcy.
If the coronavirus crisis were to end today, then people could still recover financially. They might not be hurting so bad that they have to file for bankruptcy. However, a quick recovery is highly unlikely. While COVID-19 cases are reaching their peak, life just isn’t going to get back to normal anytime soon. Shelter in place orders will likely continue for at least another month or so. If businesses are forced to stay shuttered past may, then that’s people are going to really start hurting. It is predicted that consumer and businesses bankruptcies will explode in the summer months.
People who have been laid off from their jobs aren’t going to be able to pay their rents and mortgages until they get back to work. If they aren’t able to work for several months, they are going to get behind. By fall, they could face eviction or foreclosure. That’s when they’ll likely file for bankruptcy to protect themselves.
Businesses have also been hit hard by the pandemic. Only essential businesses can stay open, and that includes grocery stores, gas stations, pharmacies and hospitals. Clothing stores, dine-in restaurants and the like are not essential, although many businesses are finding ways around this, such as by offering takeout food and other goods. Most businesses are seeing revenues decline during time. Many are not doing business at all, and this could lead to bankruptcies down the road.
Contact a Coral Springs Bankruptcy Attorney
With millions of people losing their jobs by the week due to the coronavirus pandemic, bankruptcies should be expected in the near future. If the economy does not get back on track soon, Americans will not be able to work and pay bills.
The Coral Springs bankruptcy attorneys at the Law Offices of Barry S. Mittelberg, P.A. is here for you during this stressful time. Nobody could have predicted this economic crisis, but we will do our best to help you find options and relief as you navigate your financial concerns. To schedule a free consultation, call our office at (954) 752-1213.