For Floridians who are concerned about the status of their businesses and are facing personal financial challenges, it may be useful to look at the trends for bankruptcy filings. Since it is a new year and the ongoing health crisis is continuing to impact people across the nation, bankruptcy might be an alternative to get on stronger financial ground whether that is for a business, with one’s personal finances or both. The current situation is unusual and has led to unexpected results. Those who are facing financial issues should be cognizant of strategies to improve their station, including bankruptcy.
2020 statistics show disparity in bankruptcy filings
When calculated in total, 2020 saw the fewest number of bankruptcies in 34 years. Despite that, there were the most Chapter 11 business bankruptcies since 2013. That is believed to be due to the health crisis that is still causing individuals and businesses fear and consternation. Federal court data was assessed by the American Bankruptcy Institute. It found that there were around 544,000 filings in 2020. That was 30% fewer than in 2019. When looking at the numbers more deeply, the change came about once the pandemic forced widespread shutdowns. The first two months of the year had a rise in bankruptcies of 1% when compared to the prior year.
With the unknowns and how the health challenge would play out, many hesitated before taking the necessary steps to file for bankruptcy. Chapter 11 filings increased by 29% vs. 2019. For personal bankruptcy options like Chapter 7 (a liquidation) and Chapter 13 (a payment plan over three or five years), they dropped substantially. There was a greater than 21% decrease for Chapter 7 and more than a 45% decrease in Chapter 13.
For debt relief options like bankruptcy, legal assistance can be critical
Despite the surprising results in 2020, people are still facing the prospect of financial problems in 2021. It has been reported that 2021 might have a major rise in bankruptcies as businesses can no longer stay afloat, individuals experience job loss, medical costs rise to a level that people cannot handle, and fear of foreclosure and eviction comes close to reality. For help with bankruptcy and determining whether it is the right choice or other ways to secure debt relief are preferable, it is beneficial to have experienced legal help. Whether it is a business or personal bankruptcy, consulting with a firm experienced in helping with debt solutions can be a useful step.