There have actually been fewer personal bankruptcies filed during the pandemic, but this will not continue for long. There are several reasons for the temporary decrease:
Psychological Reasons:
People tend to “hunker-down” both with physical distancing and with their finances. It is normal to watch and wait to see what will happen next. Uncertainty is the pandemic’s hallmark. Uncertainty leads to inaction.
Congressional Action:
Stimulus checks have eased the burden for some. For others, unemployment benefits have helped. And for others, temporary delays on evictions and foreclosures have helped. Of course, this aid is coming to an end.
The Courts:
Courthouses closed down, and have only reopened to some extent. These closures led to a temporary lull in collection lawsuits, though they have started back up full force now. It also means the bankruptcy Court was less accessible for a while.
THE COMING WAVE
Most experts predict a tsunami of new cases soon. The reasons for this mirror the reasons for the temporary drop. People tend to get used to things and are not as afraid to take action. Congressional aid is coming to an end. Courthouses are up and running again, even if mostly virtually.
The personal finance “can” has been kicked down the road. As the pandemic eases, many will find their finances much more troublesome than before. Talk to an attorney such as me to evaluate which bills should and should not get paid, line up all the options in proper form, and file bankruptcy if that’s appropriate.
For over 30 years, listening to clients and putting them at ease, while finding solutions and helping achieve future goals, in Marion County, Lake County. Citrus County, Sumter County, and The Villages.
