As stimulus checks and other forms of temporary relief run out, experts are projecting an increase in personal bankruptcy filings, which have so far been muted during the coronavirus pandemic, the Wall Street Journal reported. Only a new stimulus program targeting individuals or government actions forgiving or deferring student loans can keep individual filings from rising, panelists said Tuesday at an American Bankruptcy Institute conference that took place online. The $2.2 trillion Cares Act that Congress passed in March broadened jobless benefits, extended their duration and boosted the amount by $600 a week — but those extra payments have expired. Congressional Democrats and the White House continue to negotiate another economic-relief package, which could restore some of the jobless benefits that have lapsed, though prospects have dimmed for a deal before the election. “It’s clear that when it comes to bankruptcy filings by individuals, it’s all about access to liquidity,” said ABI's Ed Flynn. “With the end of the Cares Act, there will be an uptick in filings. The only question is whether it will be a sharp uptick or a gradual one.” Personal bankruptcies are projected to fall this year to 560,000, the lowest number since 1985, said Mr. Flynn, citing data collected by the Administrative Office of the U.S. Courts. But next year that total could climb to over one million, he said. President Trump has extended temporary relief for federal student loan borrowers, allowing them to defer payments until the end of the year from the end of September. “I do worry about a flood of filings by working families,” said Deirdre O’Connor, head of sales and corporate restructuring at legal-services firm Epiq Systems Inc., speaking on the conference panel. Moratoriums on evictions have also been a factor in keeping personal bankruptcies in check, said Christopher Kruse, senior vice president at Epiq, as part of the same panel.
