The coronavirus (COVID-19) crisis has hit the American economy hard, which is evident in the number of unemployment claims being filed. It has been reported that approximately 17 million American workers have filed for unemployment over the course of three weeks after many businesses have shuttered.
Research from three different Federal Reserve banks have shown that bankruptcies related to the economic downturn from the COVID-19 crisis could increase by 200,000 to reach a record 1 million filings. However, this increase is possible only if government stimulus programs do not offset this increase.
To give a basis for comparison, personal bankruptcies jumped to at least 1.5 million at the end of the 2008 Recession. It is not clear whether numbers will reach this point again but depending on how long the COVID-19 pandemic lasts and how many businesses are harmed in its wake, it is highly possible. Individuals who are suffering from COVID-19 and unable to work will likely find themselves strapped with medical debt. This debt could be a big factor in why individuals file for bankruptcy.
It is reported that Americans living in the country’s poorest region, specifically the southern U.S. are more likely to file bankruptcy petitions than any other part of the nation. Incidentally, these areas are also expected to report higher rates of sickness and death from COVID-19.
Of course, all of this depends on the course the pandemic takes, including how long it lasts, how well Americans follow social distancing guidelines and how quickly the curve can be flattened.
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Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken, P.A. website at www.miamibankruptcy.com.