From mom-and-pop stores to some of the nation’s most storied brands, companies have had to shutter their doors and file for bankruptcy as the coronavirus pandemic drags on. Meanwhile, unemployment continues to hover near record levels, a phenomenon that many analysts believe will lead to increases in personal bankruptcies in the coming months.
An ongoing analysis of commercial and personal bankruptcy filings during the pandemic shows that Texas businesses have been particularly hard hit. As of late September 2020, Texas had by far the highest rate of Chapter 11 bankruptcy filings in the country, with more than 850 coming since the pandemic began, according to data from MoneyGeek, an online finance website that is tracking commercial and personal bankruptcy filings by state.
Those 850-plus filings mean that 14.2 out of every 10,000 Texas businesses have filed for Chapter 11 during the pandemic. That’s 32 percent higher than second-place New York’s 10.7 filings per 10,000 businesses.
Most of the Texas bankruptcy filings are by energy companies. Oil prices have dropped considerably because global travel restrictions have slashed demand for air travel and working from home has eliminated the daily commute for many workers.
As for personal bankruptcy, Texas has the sixth most COVID-19-related filings in the country, including nearly 1,600 in August alone.
MoneyGeek points out that personal bankruptcy filings may have been abated so far by numerous factors. Court closures have slowed the bankruptcy process, and government stimuli temporarily have helped ease the COVID-related financial strain for some people and businesses. These and other factors are likely holding back what could be a large wave of filings in the near future. “Bankruptcies tend to be a lagging indicator of economic health. Once the factors that are temporarily suppressing filings cease, the full economic impact of COVID-19 will become more evident,” the analysis notes.
If you are struggling financially during this crisis, you should view bankruptcy as a potential tool to help you get yourself or your business back onto solid financial footing. An experienced debt relief lawyer can assess your unique situation and advise you of all your legal options.
The bankruptcy attorneys at Hayes, Berry, White & Vanzant, LLP represent individuals and businesses throughout North Texas. If COVID-19 has pushed your finances to a place that you aren’t comfortable with, call our firm to talk about it. You can reach us at 940-230-2386 or contact us online to arrange a meeting. We have offices in Denton, Flower Mound, Gainesville and Celina, and we are available for virtual consultations as well.
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