There appears to be a general decline in bankruptcy filings during the current crisis, though most courts anticipate that a wave is coming soon.
In the Northern District of Illinois, bankruptcy cases are down by about 2,000 from this point last year, said Jeff Allsteadt, clerk of the local court."We are expecting a spike in the caseload but it has not happened yet," Allsteadt toldKathy Campbell, clerk of the U.S. Bankruptcy Court for the Central District of California, said overall filings in her area for the week ending April 17 were down 58.6 percent on the same period in 2019.
"We have seen an uptick starting in oil and gas cases, and I would expect more of them if the depressed price of oil continues for much longer," Colwell added. "For context, our case filings tend to fluctuate up and down from month to month throughout the year. So it could just be a point in time when our filings would be down anyway," McDonald told"Or, other factors could be contributing to the decrease at the moment. For example, stay at home restrictions in place, or relief provided by the CARES Act. It is too early to tell what factors could be contributing to the decrease in our court at the moment, and it may only be temporary.
Quackenboss said there will be two waves when Chapter 11 filings—used primarily by companies to restructure their debts—start to rise significantly. For those whose financial challenges continue to grow, and who struggle to carry on despite the government stimulus,"bankruptcy offers a financial safe harbor from the economic storm," Quackenboss said.
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