The unprecedented events of 2020 were a financial nightmare. The drop in economic output was significant and many people in Tampa were furloughed without pay or even lost their jobs altogether. Despite this, there is some interesting news. 2020 saw fewer personal and business bankruptcy filings than 2019.
According to U.S. Bankruptcy Court statistics, personal and business bankruptcy filings dropped in 2020 approximately 30% from the number of personal and business bankruptcy filings in 2019. This included a 5% drop in bankruptcies filed due to business debt. The number of business bankruptcy filings would have been even lower, except for an uptick in Chapter 11 filings. That being said, two-thirds of U.S. Bankruptcy districts did not experience an uptick in Chapter 11 bankruptcies.
Why the drop in bankruptcy filings?
While big companies that die generally file for bankruptcy, those who own a small business may simply shut down rather than file for bankruptcy. Or, small businesses may be hanging on because although they are behind on their rent or their mortgage, due to current rules they are not yet facing eviction or foreclosure. Other businesses may simply be putting off filing for bankruptcy as long as orders to-go and online orders bring in some sort of profit.
Learn more about business bankruptcy
Despite this, many businesses may still be facing the difficult decision of filing for bankruptcy. It is important to note that bankruptcy does not deserve the negative stigma it has. Instead, it is a responsible and viable way to address your debts and move forward on solid financial footing. Those who want to learn more about business bankruptcy are encouraged to explore our firm’s website for further information.