Bankruptcy Statistics: Is COVID Forcing People to File?

According to the American Bankruptcy Institute, the nation is experiencing a counterintuitive drop in the rate of personal bankruptcies. In October of 2019, 64,279 consumers filed bankruptcy, but only 37,688 consumers filed bankruptcy in October of 2020. This is a decrease of approximately 41%.

Many people expected bankruptcies to skyrocket because of the effect of COVID-19 on the economy. However, we may attribute the 41% decrease to the local, state, and federal aid that is temporarily keeping Americans above water.

Economists predict, however, that a wave of bankruptcies is on the horizon—for both consumers and businesses. The President just signed a $2.3 trillion stimulus package, but not before other forms of aid ran out. Additionally, the stimulus check for this package is only half of what it was in March, which has left many to wonder whether they can rely on the government to carry them through this severe economic downturn.

Without adequate financial assistance, Americans who are struggling with layoffs, medical bills, and other obstacles will likely need bankruptcy to endure the long-lasting effects of the COVID-19 pandemic.

Is Bankruptcy a Good Idea?

If you’re considering filing for bankruptcy, you are not alone. Millions of Americans are rapidly accumulating unmanageable levels of debt and struggling to avoid eviction or foreclosure.

What you may not know is that, even before COVID-19, hundreds of thousands of people filed bankruptcy every year to wipe out the debt they could no longer afford. In other words, there is no shame in filing bankruptcy. This process has existed for hundreds (if not thousands) of years, and it provides honest debtors with the invaluable opportunity to start fresh.

In the coming months and years, bankruptcy will likely be a life raft for an unprecedented number of businesses and families. If you are looking ahead and feeling concerned about how you’ll make ends meet, it may be time to learn more about this powerful debt-relief process.

Consult with Our Experienced Attorney

When you bring your situation to Ronke Law, you will have the critical opportunity to discuss your options with someone who knows the bankruptcy system inside and out. Attorney Ronke can take the time to answer all your questions and help you understand how bankruptcy may vastly improve your situation. With his guidance, you will have what you need to maximize the benefits of bankruptcy and achieve a fresh financial start as soon as possible. From beginning to end, our team will personally handle your case so you can focus on building a better future.

Schedule your free initial consultation by reaching out to us online or calling (605) 250-9988 today. We offer services in English and Spanish.