Researchers at Epiq Global are claiming that as of June of 2020, Chapter 11 filing have increased 26% from 2019. They also claim that a simular jump occurred in 2008 which was followed by a dramatic increase in consumer bankruptcy filings. So far, both Chapter 7 & 13 bankruptcy filings are down for the year. But, will history repeat itself as Epiq Global suggests? My hunch is that any increase in consumer bankruptcy filings will not be as dramatic as they were following the financial collapse in 2008 for the following reasons:
1.The Affordable Care Act has greatly reduced the amount of medical debt consumers now possess.
2. The HAMP & HARP programs have convinced mortgage lenders to purse loan modifications when their clients default rather than to always resort to foreclosure.
3. The demographic bulge known as the “baby-boomers” are now at retirement age do not possess the same financial hardships they did when they were raising families.
4. State regulations have caused many short-term or “pay-day” loan companies to go out of business.
However, I do not see consumer bankruptcy cases going the way of the dinosaur anytime soon for the following reasons:
1. Credit card companies still bombard the media enticing ordinary consumers to acquire debt.
2. Income inequality is still prevalent in our society.
3. Wages remain stagnant and their purchasing power has not increased.
4. Single parent households are still prevalent and are more vulnerable to economic downturns than 2 parent households.
Once thing is for sure, this country still “runs” on finance capital and as long as it does, there will be a need for bankruptcy law and bankruptcy lawyers.