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As we enter into May, it is expected that there will be an increase in business filings for bankruptcy relief. Even with government help, many small businesses will most likely and sadly not be able to recover. Owners of these small businesses, which are commonly known as “Mom and Pop Shops,” will also most likely be filing for personal bankruptcy protection to seek debt relief.
Additionally, those now out of work prior owners, with the close of their businesses, will also be competing for job openings in the open market. All of this will lead to what many believe to be the next wave of filings by consumers. There has already been an increase in filings in April due to a group of consumers who may have just been able to pay their debt with one job and perhaps a side job such as driving for a rideshare company like Uber. But with the stay-at-home order, their main employment, as well as any part-time employment, has been drastically diminished, leading to no other option but debt relief through bankruptcy.
Times Are Changing - Know Your Options
In 2019, there were more than 700,000 filings for consumer bankruptcies. In the height of the last recession in 2010, there were 1.6 million filings. Bankruptcy in the last few years have been declining, with a 10-year low in 2018. However, as bankruptcy filings have decreased, household debt has continued to rise.
In our last recession in 2008, household debt was approximately $12.68 trillion, and as of the end of 2019, it was $14.15 trillion. With current unemployment at over 17 million new filings in the last 4 weeks, and the uncertainty of the post-reopening of the economy with the pandemic, it appears that a large amount of consumers will face the “perfect storm” of unmanageable debt.
The Coronavirus Aid, Relief, and Economic Security Act (CARES) has provisions that will make sure any temporary monetary relief will not affect consumers' ability to file a Chapter 7 or 13 bankruptcy and help current Chapter 13 debtors lower their monthly plan payments by extending the payment period. It would seem that Congress was anticipating that many consumers may have to avail themselves of filing for bankruptcy protection as their only option for debt relief.
A New Jersey Bankruptcy Attorney Can Help
Discussing your options with a New Jersey Chapter 7 and Chapter 13 bankruptcy lawyer as we go through (and upon exiting) this never-before-seen-in-history event will allow consumers and small business owners to be informed of their choices and options under the Federal Bankruptcy Code.
It continues to be the hope of all involved with creditor/debtor rights that the private debt collection companies, mortgage companies, credit card companies, utility providers, car lending companies, unsecured loan providers, cell phone carriers, Internet/cable providers, etc. will offer options to help all consumers and small business owners catch up on late payments or restructure payments. However, if they do not, then all consumers and small business owners need to know their rights for debt relief through bankruptcy.
Find out about your options under Chapter 7 or Chapter 13 with one of our New Jersey bankruptcy attorneys in confidence. To schedule a free, no-obligation consultation at Helmer, Conley and Kasselman, call us at 877-435-6371 or tell us how we can help online today.
