The coronavirus pandemic has created a situation where bankruptcy professionals are “overwhelmed” with the number of inquiries they are receiving from consumers and businesses who are out of work and are running out of options, according to the executive director of the American Bankruptcy Institute, who was quoted in a published report.
Webinars being run by the ABI are receiving between five and 10 times as many registrations today than they did prior to the country essentially being shut down last month. Since then, more than 26 million individuals have filed for unemployment benefits and people are scrambling to find ways to make ends meet.
During the last recession, more than 1.5 million individuals filed for bankruptcy protection, said Amy Quackenboss, the ABI’s executive director. The number of individuals who file because of the COVID-19 pandemic could be “even more than that,” she said.
The unemployment rate could reach or surpass levels that have not been seen in the United States since the Great Depression, according to economic experts. The unemployment rate could hit as high as 16% during the third quarter of this year and may stay above 10% well into 2021, according to a report from the Congressional Budget Office. Prior to the pandemic, the unemployment rate was hovering around 3.5%.
“I think the next couple of months are going to look terrible. You’re going to see numbers as bad as anything we’ve ever seen before,” said Kevin Hassett, an advisor to President Trump, referring to U.S. economic data.
The worst news is that the economy likely has not hit the bottom yet, according to published reports
