Many thought the Covid-19 pandemic would bring expectations of dramatically increased bankruptcy filings. Businesses closed their doors to customers, people lost their jobs, tourism ground to a halt, kids attended school from their bedrooms, and non-essential workers who still had jobs worked at their dining room tables. It seemed inevitable that bankruptcy filings would flood in – but they didn’t.
Nationally, bankruptcy filings (including business and consumer cases filed under Chapters 7, 11, 12, 13) have collectively declined year after year since 2010 and, to the surprise of many, continued to decline from 2019 to 2021.
Many analysts think that the overall decline in total bankruptcy filings is attributable, at least in large part, to the many relief programs that were offered with the rise of Covid-19. But many of these relief measures have come or will soon come to a close.
For example, eviction bans and foreclosure moratoriums are coming to an end, enhanced unemployment benefits have ceased, and PPP and SVOG loans that have not been forgiven will come due. With these transitions, the likelihood of increased bankruptcy filings seems high.
Given that likelihood, businesses would be wise to arm themselves with some basic bankruptcy information. Do you have clients, customers, vendors, or tenants? If so, you might find yourself a creditor in a bankruptcy case. Is your business struggling to emerge from the pandemic? If so, bankruptcy might be the tool your business needs.
While bankruptcy analysts have been surprised that no Covid-19-driven wave of filings has occurred, it is ultimately still a very real possibility. Whether you are a potential creditor or debtor, consider doing your research and preparation now, so you won’t get caught by surprise if the wave finally hits.
Business disputes are everywhere. And when those things negatively impact you and/or your business including bankruptcies, landlord/tenant matters including unlawful detainers, contract issues, nuisance ADA claims and even collections, call in your good guy business litigator, Dean Sperling to resolve YOUR matter with YOUR best interests in mind!