The U.S. went into the Great Lockdown with the most household debt in history, stagnant incomes for all but high earners and armies of people telling pollsters they were living paycheck to paycheck, The New York Times reported. Then, for millions, their paychecks stopped. But instead of a stampede to the bankruptcy courts, personal bankruptcy filings dropped sharply from April through June, even as unemployment soared. American households had more debt than ever when the pandemic sent unemployment soaring this spring. But bankruptcy statistics have yet to reflect the struggle to manage that debt; personal bankruptcy filings are in sharp decline. “Filings have just gone through the floor,” said Henry E. Hildebrand III, a consumer bankruptcy trustee in Nashville, Tenn. Mr. Hildebrand usually gets 350 to 400 new cases a month, he said, but last month he added just 107. Nationwide, the drop in personal bankruptcy filings is the biggest in 15 years. One reason for this counterintuitive picture: The federal government’s stimulus package, which, beginning in April, has put cash into unemployed people’s hands on a weekly basis, allowing them not just to buy groceries and pay rent, but to pay down existing debt. As of mid-June, the Treasury Department had issued nearly $270 billion worth of stimulus payments to some 160 million people. Unemployment benefits, which normally average about $340 a week, were temporarily increased by $600 a week. Some unemployed people now have more income than when they were working.
