Most economic experts have released predictions for the number of expected bankruptcy filings during the pandemic (2020-2021). However, new reports show that the number of filings may be less than what was previously thought. Keep reading to learn more.
What Happened to All the Bankruptcies?
During the height of the pandemic, the government approved many comprehensive assistance programs to support families and businesses during lockdowns and quarantine. Families with several minor children could receive a tax credit per child, small businesses could apply for PPP loans, and student loans were frozen. State and local governments also took strides to protect people from complete destitution while losing their jobs and suffering from the coronavirus.
These measures proved effective for most people during the worst part of the pandemic. There were still those who struggled to keep up with debt payments and had no choice but to file for bankruptcy. Approximately 400,000 Americans filed for bankruptcy in 2021. These numbers seem high, but they are actually lower than 2019 – a full year before the pandemic.
While this is undoubtedly a positive report, economic experts are pivoting to a new prediction – post-pandemic bankruptcies will outpace pandemic filings. Not only do analysts expect numbers to rise, but they also anticipate that they will increase rapidly.
Why Bankruptcy Filings Could Increase
There are many reasons why bankruptcies are expected to increase. For starters, inflation has risen to the highest rate in over 40 years. This means that consumers are paying more than they have in their lifetime for the bare necessities. Large metropolitan areas are hit the hardest by rising gas and food prices, but people in rural towns around the country are feeling the pressure.
The power of cryptocurrency is waning, leading many digital investors from being on the cutting edge to falling off entirely. Crypto scams, NFTs, and other tech bubbles are beginning to burst, which spells trouble for many who depend on their investment yields.
The housing market has all but stalled because most people cannot afford to move, and those that can, cannot afford astronomical housing prices in desirable areas. The mass exodus from states like New York and California is proof that the future of housing in America seems troublesome at best.
Not only is the economy an issue, but people are also struggling with the virus and post-COVID illness. Those who were hospitalized may have long-term health conditions as a result, and even those who had a less severe version of the virus could have symptoms for months after the fact. These medical bills are becoming an unbearable burden for millions of people who cannot afford to pay them.
What You Can Do
While the idea of bankruptcy may be intimidating, it is a legitimate form of debt relief that can help you recover financially. With the right guidance from a qualified legal professional, you can have most of your debts permanently discharged in court, and creditors can no longer harass you for the money you owe.
Buchalter & Pelphrey Attorneys at Law can evaluate your circumstances and provide a wealth of insight so you can make the right decision for yourself and your family. Bankruptcy is a viable option for many, but there are bankruptcy alternatives that could give you the debt relief you need.
Contact our firm today for more information.
Let our family help yours.