The number of people filing for bankruptcy could set records next year. And, while bankruptcy reform artificially spurred the 2005 record of nearly 2.1 million cases filed, this peak will be all about the reality of a Covid-19-blasted economy. That’s a bankruptcy tidal wave of a different color.
So far, 2020 has avoided a surge of personal bankruptcies. In fact, total bankruptcy filings year to date trail the 2019 figures.
This may be because of federal stimulus payments, mandated mortgage and other loan forbearance, unemployment insurance enhancement and the additional support provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and other government programs. It may be because people are borrowing less. But, whatever the cause of the decline, bankruptcies still seem likely to rise if unemployment and loss of income persist.
Uncertainty, however, has been a hallmark of Covid-19 in 2020. With that in mind, perhaps