A series of government interventions in the wake of the novel coronavirus pandemic has kept the country’s bankruptcy levels at their lowest since before the Great Recession.
According to Dan Cox, executive vice president and chief credit officer of Riverview Bank, Paycheck Protection Program loans, eviction moratoriums and improved unemployment benefits have enabled individuals and businesses to ride out the downturn caused by the pandemic without having to seek creditor protection through the bankruptcy process. in Vancouver.
But Cox said once that aid runs out — and it’s unclear when — the number of bankruptcies and other financial hardships could begin an annual spike for the first time in a decade.
In 2020, Clark County residents or businesses filed 772 bankruptcies, which continued a downward trend. The number of filings has fallen every year since the 1,466 filed in 2015.
“Since 2010, the economy until the pandemic has seen robust growth: pedal to the metal,” Cox said.
Traders hit hard
Bankruptcies in one industry have increased since 2010: retail stores. In 2020, the list of bankrupt retailers in Clark County grew, including Pier 1, JC Penney, and GNC.
Most individuals won’t file for bankruptcy unless forced to, Cox said. During the 2008 recession and the years that followed, many homeowners found themselves with a mortgage they couldn’t pay. As a result, bankruptcies nationwide increased in 2010.
“Since 2010, if people can’t afford it, they can sell their house,” Cox said. “They can pay off their debt by selling their assets.”
The struggle continues
Weekly unemployment insurance deposits remain at a record high and there are not enough jobs available; continuing unemployment insurance claims reached 16,406 in Clark County in the first week of February.
“Those who struggle ahead will struggle to get through this and beyond,” Cox said. “Those who don’t struggle before the pandemic are the ones who will get through it. Many businesses and people use their personal wealth and government assistance to get by. Who has enough to cross to the other side?
Cox also noted that the courts were closed for much of 2020, and even if someone wanted to file for bankruptcy, they had to wait. In addition, court costs are expensive.
“There are plenty of modification and debt relief options out there for buyers who are experiencing stress,” Cox said. “These benefits are protected from creditors.”
Plus, Cox said, bankruptcy isn’t much of an option for people who don’t own a home or have lost their jobs. “You must have something to lose to declare bankruptcy,” he said. “There is nothing left to lose now.”
The housing market in Clark County is still buoyant and if a landlord needs extra cash, they can sell a home and turn to renting, Cox said, and the number of renters is expected to increase in the near future. .