Is COVID-19 Causing Increase In Bankruptcy Filings?
Ongoing concerns over the COVID-19 pandemic are continuing to impact every aspect of the lives of New Yorkers. With rising case counts and increased business closures, any return to normal is unfortunately not likely to happen until spring. As a result, many individuals and companies hard-pressed by the situation will be turning to bankruptcy to provide some relief.
COVID And Bankruptcy Filings
COVID-19 is continuing to take a heavy toll on the nation. Between the nearly 600,000 confirmed cases reported by the New York Department of Health and widespread job losses throughout the state, many people are hurting both emotionally and financially. As it becomes increasingly hard to juggle medical expenses, monthly bills, and debts such as mortgages and car payments, people are likely to turn to bankruptcy as a solution.
Filing for bankruptcy can help completely alleviate certain debts while restructuring payments on others. It frees you from the endless cycle of paying high interest rates on past due balances and heavy late charges or other penalty fees, which can make it impossible to ever get caught up. It can also quiet the calls from collection agencies and any legal actions they are threatening to take.
Currently, a Columbia Law School study shows that the number of bankruptcy petitions in 2020 are thus far comparable to those that were filed in 2019. However, stimulus payments alongside increased and more inclusive unemployment wages throughout part of the year may have helped some to remain afloat. Experts now are predicting that there could be a tidal wave of bankruptcy filings over the course of 2021.
Bankruptcy Provides Relief For Businesses Impacted By The Pandemic
While bankruptcies have thus far remained steady through the pandemic, there have been numerous business bankruptcies filed by companies large and small alike. A November 2020 NBC News report states that the retail and restaurant industry has taken a particularly large hit, with companies such as Friendly’s, J. Crew, JCPenney, and Neiman Marcus being forced to close stores. The travel industry is another area that has suffered widespread devastation.
While many companies benefited from stimulus packages and bailouts that allowed them to meet payroll and other expenses, even the large amounts received are often not enough to make up for losses. In these cases, bankruptcy can be provide several benefits:
- It can allow businesses to temporarily suspend or reorganize certain types of debts;
- It can give you the chance to renegotiate contracts with vendors and suppliers;
- It can help to eliminate some of your losses due to excess and unmoveable inventory;
- It can reduce the personal risks business owners often face due to liens and other legal actions.
Let Us Help You Today
At the Law Office of Harry D. Lewis, we know what a difficult time this is both for business owners. As an experienced New York City bankruptcy attorney, we can guide you in the options for seeking some relief. To request a free consultation regarding your case, reach out and call or contact our office online today.