The due date is quickly approaching for Nevadans who have racked up thousands of dollars in missed rent payments and other debts. For many, easing the financial burden will mean filing for bankruptcy, and experts predict a wave of filings after the new year, when the remaining relief from March’s federal $2 trillion stimulus package known as the CARES Act expires, the Las Vegas Review-Journal reported. An influx of bankruptcies normally corresponds to an increasing unemployment rate, and a coronavirus- fueled recession and a skyrocketing number of jobless workers would cause more filings. But in an unexpected twist, the number of people filing for personal bankruptcy such as chapter 7 and chapter 13 has dropped significantly since mid-March, according to a September study from Harvard Business School. Sullivan Hill Managing Attorney Elizabeth Stephens said that the CARES Act is why consumer bankruptcies are down including in Las Vegas. “(It) poured $2.2 trillion into the economy,” she said, adding she expects to see “a torrent of bankruptcy filings” after CARES Act protections like additional unemployment benefits and other federal provisions such as the federal eviction moratorium expire Dec. 31. Stephens also pointed to an increase of commercial chapter 11 bankruptcies as a key indicator of what is to come for consumer filings. “Generally, business bankruptcies precede consumer bankruptcies,” she said. ABI reported last month chapter 11 filings increased nationally by 33 percent during the first nine months of this year to 5,529 compared with the same period in 2019. The Federal Reserve Bank of San Francisco also released a study last month saying, “Chapter 11 bankruptcy filings are running at their fastest pace since 2013. The number of companies that have defaulted on their debt so far this year has surpassed the total for all of 2019 and is on course to be the highest since 2009.”
