The year 2020 was a blockbuster one for disaster, with a global pandemic and a contentious U.S. presidential election, respectively, as the opening and closing credits. For many Americans, the biggest impact was the financial changes they had to face due to COVID-19’s effect on the U.S. economy. Despite the small boost the Coronavirus Aid, Relief, and Economic Security (CARES) Act provided in early 2020 and the short span of federally increased unemployment checks, many households are still struggling to make ends meet due to coronavirus-related circumstances. If you’re among the thousands who are finding it impossible to make financial ends meet, bankruptcy is still available to debtors even in times when some courts may be closed for in-person cases. Those considering filing for bankruptcy in Owatonna, MN, and the surrounding areas can find guidance and protection from Behm Law Group Ltd. attorneys.
As we move into 2021, we can look back and see how the pandemic and government actions to support citizens impacted bankruptcy statistics. We can also predict how cases may increase or decrease depending on how stimulus bills and other support systems are enacted this year.
Some Basic 2020 Statistics*
*Cited from a GlobeNewswire report published January 21, 2021.
- The total number of 2020 bankruptcies cases across all chapters was 529,068. This is the lowest case rate in the United States since 1986.
- Chapter 11 business bankruptcy cases reached 7,128—a 29% increase from 2019.
- Chapter 13 individual consumer cases reached 147,144—a 46% decrease from 2019.
- Chapter 7 individual consumer cases reached 348,42—a 22% decrease from 2019.
- The 2020 CARES act released in March totaled $2.2 trillion, sending $1,200 per adult and $500 per child to households making under $75,000 a year.
- The second 2020 stimulus act released in December totaled $900 billion, sending $600 per person in households making under $75,000 a year.
- In 2021, the U.S. Congress may approve President Joe Biden’s proposed stimulus act totaling $1.9 trillion, sending an additional $1,400 per person in households making under $75,000 a year.
The balance between government-issued stimulus checks and increased unemployment benefits most likely played a role in helping people facing daunting financial circumstances. For many U.S. citizens struggling with debts, the stimulus checks gave temporary stability during difficult times. That stability may continue through some of 2021 if more stimulus support is provided through Biden’s proposed plan. However, if the current situation continues the way it is and the coronavirus dangers aren’t relieved, the economy will have a hard time recovering back to pre-COVID conditions. This may mean an increase in bankruptcy cases this year.
The distribution of vaccines to prevent coronavirus and time will be major factors in considering our country’s future economic health. If you’re struggling now, it could be the best time to file for bankruptcy in Owatonna, MN, and the surrounding communities. To learn more about the process, call Behm Law Group Ltd. at (507) 387-7200 or email stephen@mankatobankruptcy.com.
