As the coronavirus raged on in April, consumer bankruptcies were... down?
With unemployment surging and businesses under financial pressure during the coronavirus outbreak, it’s only a matter of time before many declare bankruptcy to handle their debts and get a new start, some observers say.There were 47% fewer consumer bankruptcies in April 2020, compared to April 2019, according to statistics released Tuesday by the American Bankruptcy Institute .
Meanwhile, more than 30 million people filed jobless claims by the end of April while one business-activity index on the economy’s service sector hit an all-time low during the month.The $2.2 trillion stimulus bill played a role, according to Amy Quackenboss, ABI’s executive director. — Amy Quackenboss, executive director of the American Bankruptcy Institute “The extraordinary measures taken by Congress and the Administration to assist individuals and businesses weather the initial economic shock caused by the pandemic have likely staved off bankruptcy filings to date,” Quackenboss said in a statement.The IRS had sent out nearly 90 million checks as of mid-April, but some say the one-off payments won’t suffice.
In the San Diego, Calif. area where Colwell works, a Chapter 13 case where debtors pay their creditors through installments, can cost upwards of $3,900. Those legal fees can be incorporated into the payment plan, he noted.
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