How Has COVID-19 Affected Bankruptcies in Massachusetts?

How Has COVID-19 Affected Bankruptcies in Massachusetts?

Even someone who knows absolutely nothing about economics understands the negative impact COVID-19 has had on businesses across the United States. When the nation locked down, many businesses in Massachusetts were forced to close their doors. Many of these businesses ended up going bankrupt because of the economic pressures of the pandemic. But what do the statistics actually say about bankruptcies in Massachusetts during COVID-19? How many of these businesses were able to escape bankruptcies thanks to financial assistance from the government? What does this mean for the future of Massachusetts’ economy?

If your business is facing economic pressures during the pandemic, you might want to reach out to an experienced bankruptcy lawyer who can help you through this difficult time. Speak with an attorney who understands the various pros and cons of declaring bankruptcy, and you can approach this situation with confidence.

Surprisingly Enough, Bankruptcies are at an All-Time Low
The fact that COVID-19 negatively impacted the Massachusetts economy is undeniable. One would expect that because of this, bankruptcies would be at an all-time high. In fact, the opposite seems to be true. According to the Boston Business Journal, bankruptcies fell in 2020. Not only that, but the total number of bankruptcy filings is at its lowest level since 2006.

Bankruptcies Could Surge in the Coming Years
Despite the seemingly-encouraging fact that bankruptcies are less common than ever before in the Bay State, experts believe that this could change drastically within the next few years. In fact, some believe that the delayed effects of a major recession are about to hit. When this recession hits home, bankruptcies will actually surge. Generally speaking, the bankruptcy rate is not an accurate indicator of what is happening in the here and now. Bankruptcies tend to lag behind economic pressures, such as lockdown orders. In addition, courts were shut down in Massachusetts for long periods of time during the pandemic, and this might have prevented businesses from filing in the first place.

When businesses experience financial pressure, it may take them six months before they finally go bankrupt. In some cases, this drawn-out process can last more than a year. In addition, businesses are linked together in Massachusetts, forming a co-dependent network. One or two bankrupt businesses might not affect the entire network, but it can quickly create a domino effect over time. As more businesses go bankrupt in the coming months, it could create what financial experts refer to as a “ripple effect.”

Enlist the Help of a Qualified Bankruptcy Lawyer Today
If your business is struggling during the pandemic, you are not alone. There are plenty of resources available, and you can reach out to a skilled attorney today to go over your options. If you have been searching the Massachusetts area for help, look no further than the Law Offices of Johnson, Sclafani & Moriarty. We have been helping businesses of all sizes in Massachusetts for many years, and we can help you during this difficult time. Reach out today, and we can develop
an action plan together. Contact us now at 413-732-8356