According to the New York Times, corporate America is starting to see Covid-19 related bankruptcies on the increase.
At Faucher Law, P.C., we still haven’t seen this increase. Note that the New York Times doesn’t give statistics, and it’s only talking about major corporate bankruptcies: chapter 11, not chapter 7. It doesn’t even mention chapter 11’s new subchapter V.
Here is a chart showing that chapter 7 filings were almost 30 percent less in May 2020 than in May 2019: 2020-06-18 Current Year Filings for Central Distri…ornia _ United States Bankruptcy Court
What’s really going on? I see that creditors are not pressuring debtors because of the coronavirus. The IRS and FTB have shut down their involuntary collection actions. Sheriffs are not evicting renters or squatters. Collection agencies can’t file lawsuits. The repo man is idle. Debtors here do not need protection just yet.
But they will. Freezes on legal process cannot last forever. In the next six months, we will see a huge number of people needing bankruptcy services. We will see a coronavirus surge in bankruptcy.
I’m here to help with that.
June 18, 2021