As we continue to move through this uncertain time, more economic concerns may rise, including the increase in business and individual bankruptcy cases. If you are struggling to meet debt payments during the COVID-19 pandemic, you are not alone. Millions of Americans are finding their finances shaken up in an unwelcome way, and many will find relief in bankruptcy. While filing for bankruptcy is often viewed as a drastic action, the process is a truly effective one that provides debt relief for many more people and businesses than you might think. At Behm Law Group Ltd., we offer clients expert guidance, advice, and legal protection while they find their financial footing as an individual or business by filing for bankruptcy in Owatonna, MN.
The initial coronavirus crisis and ensuing shutdowns caused many events to occur, including a steep decrease in the number of bankruptcies filed from March to June. This plunge in cases was directly caused by the lockdown and stay-at-home orders, in addition to some other factors.
Why the decrease happened:
- Courts were closed during the state-wide shutdowns. This caused the cases already in motion to be halted, and other individuals who might have filed soon were forced to hit the pause button.
- The CARES Act included financial boosts for almost every individual with the issuance of stimulus checks and the federal benefit of $600 per week for each individual for unemployment. This aid was added to many people’s bank accounts and it enabled them to pay their creditors during the shutdowns.
- The government alleviated many debt obligations through a moratorium on evictions, foreclosures, and other aspects of loans, which included all federal loans and many private loans through banks and other lenders.
- Finally, many creditors offered grace periods on loans, giving debtors more time to pay, waiving late fees, and offering forbearance programs. Both the government alleviation and the provision of adjusted debt requirements allowed those struggling financially to better address more pressing needs with their tight budgets.
All of the factors that contributed to the decrease of bankruptcy cases are now over. The stimulus checks have been spent, the unemployment benefits will be ending at the end of July, and many other aspects of the CARES Act have run their course. Now, with the debt payment requirements and the consequences for not making payments back to normal, the same financial issues that people faced before the coronavirus pandemic started are becoming problems again. This, in combination with the beginnings of a severe economic recession, show signs that bankruptcies will increase dramatically in the next year.
For those facing the newest financial burdens on top of the ones they were already facing before the COVID-19 pandemic started, filing for bankruptcy might be the right choice. To learn more about filing for bankruptcy in Owatonna, MN, and the surrounding area, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.
