The pandemic has been brutal for many people and businesses. And, of course, it only made things worse for those who were already struggling.
So, to combat the economic downturn, governments worldwide offered stimulus packages to help support those in need. For some, it provided some needed relief, but for many individuals and businesses, it was a life preserver.
The problem? Many of those funds are starting to run out, leaving people wondering what comes next. And as a result, experts predict a surge in bankruptcies in the coming months.
According to Epiq Global, new bankruptcy filings for January have increased year-over-year by 18.3 percent. While some may see this as a “minor uptick,” it should be noted that January 2022 saw a similar increase from the previous year. Therefore, logic suggests that this is a trend that could continue throughout the year.
Businesses are particularly vulnerable, as the pandemic hit many industries hard, and recovery has been slow for many. The hospitality and tourism sectors, for example, were hit particularly hard. Even with government aid, many businesses have been forced to take on additional debt to keep their doors open. And when the stimulus runs out? Those same businesses will be left with large amounts of debt, reduced income, and few recovery options.
But individuals are still feeling the pinch, too. While some have been able to save money due to reduced spending, others have found themselves in a precarious financial position. Large segments of the population could not work full- or part-time hours due to lockdowns, while others were laid off. And, same as with businesses, it’s becoming harder for people to make ends meet without the stimulus money.
Waiting until you’re drowning in debt will only worsen things, so you should take action as soon as possible. Here are some steps you can take to get back on track:
The steps you take are different if you’re a business owner. Some things to consider include the following:
Maybe your business didn’t suffer as much during the pandemic – you might have even seen an uptick in sales or money coming in! Still, it’s always a good idea to be prepared for the future.
You’ve seen the damage that can be done when disaster strikes – here are some things you can do to help protect yourself in case of future financial difficulty:
While government aid has helped support those in need, the end of those programs is on the horizon – hence why bankruptcies are predicted to rise. That’s why taking action before the problem becomes unmanageable is vitally important. Connect with us at the Van Horn Law Group and receive a free consultation if you need help determining your options.
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