April 3, 2020
Katz Law, APC is an experienced bankruptcy law firm in Los Angeles, California that specializes in assisting individuals who have fallen into hard times financially. In light of our experience in bankruptcy, we have been recently contacted by a large amount of individuals inquiring about bankruptcy in light of the Coronavirus Pandemic that has hit the world, and specifically, Los Angeles, CA. One question we often get asked is whether Coronavirus will result in increased amount of bankruptcies. We certainly believe that it will, especially considering the significant amount of people losing their jobs in the United States (as of the date of this article, more than 700,000 people were reported losing their job).
Let’s Talk Some Numbers (Before Coronavirus)
Before we get into Coronavirus, let’s discuss the number of bankruptcies in the Central District of California (which includes most of Southern California, but not San Diego). In 2019, which was a “healthy” year for the economy, there were 37,117 bankruptcy cases filed in the Central District of California. In 2018, that number was 35,961 and in 2017, the number of bankruptcy cases in the Central District of California was 37,262. Now let’s go back to 2009, 2010, and 2011, during the height of the economic crisis. In 2009, there were 107,082 cases reported in the Central District of California, in 2010, the number of bankruptcy cases reported was a whopping 139,169, and in 2011, the number of bankruptcy cases was 130,511. As you can see the number of bankruptcies QUADRUPLED when comparing good economic times to bad ones.
How Will the Coronavirus Affect the Number of Bankruptcy Cases?
Looking at the numbers above obviously raises concerns about the significant rise in bankruptcies. We are going through difficult economic times in Los Angeles, where significant amount of businesses are closed and not generating any revenue. Additionally, there are hundreds of thousands (probably millions by the time the Coronavirus is over) who will have lost their jobs. While we do expect a significant spike in bankruptcy cases, it is still unclear if the number of filings will reach those in 2009-2011. In 2009-2011, the crash was directly related to the housing crisis in the United States, driven by bad loans. Now, the downturn will not be forced by bad loans, but by people simply being unable to pay their bills due to lack (or reduced income). In any event, our Los Angeles Bankruptcy attorneys will be ready to assist those who have suffered economically due to the coronavirus.
Can Bankruptcy in Los Angeles Help With Debts Post-Coronavirus?
Of course. In fact, bankruptcy was put into place specifically to assist individuals who have fallen into hard times financially. If one qualifies for a Chapter 7 bankruptcy (yes, you must qualify for a bankruptcy), he/she may be able to wipe out all debts such as credit cards. If, however, one who is in financial difficulty does not qualify for a Chapter 7 case, Chapter 13 is an alternative wherein you will be able to pay your debts over a certain period of time. Chapter 13 is often filed for individuals who have assets, like a home, but have fallen behind on their mortgage payments.
Consult With A Qualified Attorney Now!
If you or your loved one is considering bankruptcy in light of the Coronavirus pandemic, we urge you to consult with a bankruptcy attorney before deciding your next step. Katz Law is here to help those who are considering filing for bankruptcy in Los Angeles or in the surrounding counties. At Katz Law, we are qualified in handling bankruptcy cases. If you need bankruptcy advice, contact a Los Angeles attorney now! Our attorney at Katz Law is ready to help you immediately! Also note that in light of social-distancing, we are willing to conduct our free consultations by phone or by video. Just call us to set up an appointment.
Call us now at (310) 444-9444 for a FREE CONSULTATION!