Upstate bankruptcy attorneys say it’s not a question of if, but when an onslaught of personal bankruptcy filings will come.
“Americans already had household debt before COVID-19,” said Greenville attorney Gina McMaster. “With the pandemic causing record high claims for unemployment benefits, it is only a matter of time before struggling Americans eek bankruptcy protection.”
Consumer protection attorney Susan Ingles of South Carolina Legal Services said the scenario is similar to that of a natural disaster when nexpected bills mount and the ability to pay them runs short.
But COVID-19 is worse because it is lasting longer, she said.“It’s a domino effect,” Ingles said, leaving many people with no solution other than bankruptcy.Before COVID-19 closed schools, shut down businesses and caused massive job losses, bankruptcy filings in South Carolina were relatively few and steady.
Through April this year, 2,009 Chapter 7 and Chapter 13 bankruptcies were filed statewide in the U.S. Bankruptcy Court District of Columbia, averaging just more than 500 a month since January.
Greenville had 149 total filings; Spartanburg 96; Cherokee 10; and Union 6. The filings were mostly split between Chapter 7 and Chapter 13, although more than double of Greenville County’s filings were Chapter 7.Chapter 7 discharges a debtor from certain debts such as credit cards, medical bills, personal loans, repossessions, overdrafts and check cashing loans.
