The previous year was a hard one for all of us. With the constant threat of the spread of COVID-19 all over the world, many people were confined to their homes for fear of contracting the virus. Hospitals overflowed while businesses closed, making it hard for people to earn a living. Countless people lost their jobs all over the world, and Maryland is no exception. With the sudden closure of businesses and many restrictions, business owners and other individuals turned to bankruptcy to keep their creditors at bay. While some turned to bankruptcy lawyers in Baltimore, Maryland for help, others decided to delay filing even as our economy suffered a tumultuous year.
Why is that?
Throughout the past year, many pandemic relief options were made available. Stimulus checks, pandemic unemployment benefits, deferred student loans, and mortgage payments played big roles in staving off the need for filing bankruptcy. Although all of those relief options were able to delay bankruptcy filing for the past year, things could very well change once the relief options expire. The beginning of this year is promising with the steady decline of bankruptcy filings across all chapters. However, we can expect that new filings will grow substantially in the second half of 2021. Meaning, Baltimore’s bankruptcy lawyers will be busier than ever.
With the coming of a new year, many people are anxious about the things to come. Will things get better or worse? Well, let’s find out.
Travel and transportation, healthcare, retail, energy, real estate, and hospitality industries were the most affected throughout 2020 due to COVID-19 restrictions. This means 2021 will be a year of critical decision-making for them.
Even though those industries are the most affected, financial experts say that businesses that don’t rely on foot traffic, retail sales, or travel will also face troubles in 2021 and beyond. The energy industry will experience many changes soon due to the ongoing efforts of reducing fossil fuel emissions. Even though many companies plan to move back into their offices once the pandemic passes, many will choose not to. The rising trend of working-from-home will continue to leave a big impact on the commercial real estate market.
Here are some additional bankruptcy forecasting trends for 2021:
- Chapter 7 filings for both individuals and businesses are expected to rise mid-2021 once benefits and enhancements expire.
- Chapter 11 commercial filings will continue to increase after PPP loans expire.
- Healthcare industry filings will also rise once government stimulus aid is discontinued.
- Recreational businesses catering to large groups will need to find creative ways of staying afloat or else they will have no choice but to restructure.
- Smaller businesses will need to take advantage of a more efficient type of Chapter 11 bankruptcy called Subchapter V.
Many changes are expected to happen in 2021 and we must all remain vigilant of the things to come. If you have already been affected by the changes that occurred throughout the past year, you will need the help of a good bankruptcy lawyer in Baltimore, Maryland. Choose Atty. Richard Hackerman to help you protect yourself from the increasing financial challenges to come.