A wave of large corporate bankruptcies is about to hit the U.S. economy. That could spark job losses for thousands of Americans, according to Wall Street forecaster Danielle DiMartino Booth. The Q.I. Research CEO indicated that a climb in corporate bankruptcies over the past year is a sign that businesses are struggling under higher interest rates and tighter financial conditions. Corporate bankruptcies rose 88% through April this year, according to data from S&P Global. This marks the highest number of bankruptcies recorded in the last 12 months. Booth believes that number will continue to rise throughout June and into July.
It is no secret that corporate bankruptcies are an economic indicator for the rest of the economy. When these businesses downsize and close, it reduces the overall number of jobs available and sends workers searching for new opportunities. This can also increase the number of personal bankruptcies filed by individuals who lose jobs to corporate bankruptcy.
Nine companies worth $50 million of more have failed so far this year, which marks the fastest pace of large bankruptcy filings since the pandemic. Booth predicts that the number of large bankruptcies will continue to climb to 25 by the end of June, a mark which surpasses the peak of large corporate bankruptcy filings during the pandemic.
While the U.S. job market currently remains on solid footing, the unemployment rate has ticked up to 4%. In addition, the economy has lost around a million full-time workers over the last 12 months, Booth noted, with large companies like Rite Aid declaring bankruptcy.
Qualifying for Bankruptcy Soon After Job Loss
The majority of individuals who file for bankruptcy do so under Chapter 7. This can occur after the loss of a job. You don’t have to be employed to file for bankruptcy. However, if you don’t have any income coming in, then it would be hard to file under Chapter 13, which means you have to make repayments to your creditors.
The majority of individuals who are filing for bankruptcy due to a recent job loss will file under Chapter 7 or liquidation bankruptcy. The loss of their job means they can no longer make minimum payments on credit card bills, mortgages, car loans, and more. Chapter 7 bankruptcy can help you discharge debt related to credit car expenses and more. It is also the most popular form of bankruptcy to file under if you’re on unemployment.
Talk to a Danville, IN, Chapter 7 Bankruptcy Lawyer Today
If you are facing the pinch of a harsh economy or have recently lost your job because your employer downsized, it may be time to consider a bankruptcy lawyer. Chris Arrington represents the interests of those who can no longer pay their debts, are accruing interest on debts they cannot afford, or are facing creditor lawsuits. Call our office today to schedule an appointment and learn more about how we can help.