CLARKSBURG, Va. (WV News) – West Virginia’s bankruptcy filings were trending down anyway. Then from June 2020 to June 2021, at the heart of the pandemic, these figures fell further.
Two veteran bankruptcy lawyers, Bill Pepper of Charleston and Tom Fluharty of Clarksburg, say COVID-19 relief measures, including roughly trillions of dollars in funding spread nationwide, likely played a role an important role in limiting deposits.
But whether this is likely to keep deposits low for a long time or lead to a large increase in the number of cases over the next two years is up for debate.
Pepper and Fluharty, West Virginia attorneys for over 40 years, also spoke with The State Journal and WV News about how Viatris shutting down Mylan’s former pharmaceutical plant in Morgantown could impact the bankruptcy landscape; and they gave some advice on how state residents can avoid bankruptcy, but also when it is best to seek federal help.
The Northern District of West Virginia recorded 1,322 cases in 2016, 1,378 in 2017, and then the number began to decline: 1,243 in 2018; 1,121 in 2019; 1,079 in 2020; and 776 in 2021. In southern West Virginia, the number of cases was 1,942 in 2016 and 2,060 in 1017 before they also began to decline: 1,901 in 2018; 1,778 in 2019; 1,582 in 2020; and 1,100 in 2021. Figures are for 12-month periods ending every June 30.
The subject of the sharp drop in numbers over the past year comes up in “about 2 minutes” when the bankrupt lawyers meet, Pepper said.
âThe general consensus that I have observed, at least with respect to private, individual bankruptcies, ordinary people, people who file bankruptcy, usually normal Chapter 7 bankruptcy, are the same people who have received a substantial influx. government money, âPepper said.
“In other words, prolonged unemployment, the new child tax credit. They are also protected against foreclosures and evictions and the creditors are laying off and are not very zealous because it is difficult to go to court in because of COVID restrictions, âPepper mentioned.
“The process of forcing people to pay their debts has come to a halt, as it should” because of the crisis, Pepper said. “So all of that combined to relieve the pressure, the pressures, that usually make people file for bankruptcy.”
“So if no one is trying to get you back or threaten you, no one is trying to grab your paycheck, no one is trying to get you out of your house or to seize your car for nonpayment, then you don’t know. not if you have to report. people don’t deposit until they have to. They don’t want to drop. So in terms of individuals, I think that would be exactly how I would put it, and most of my colleagues that I have had the discussion with share that point of view, âhe said.
âNow, on business, there are a lot of factors. I spoke about an hour ago with a potential Chapter 11 client, and he got $ 900,000. [paycheck protection] to lend. Earlier this year, small businesses arrived locally. They were in the [$350,000 range]. There are some companies, I guess that kept them from going bankrupt because they got massive PPP loans, âPepper said.
âNow a lot of them make up for it; I’m sure some won’t. The big question is if we just kick the box and there’s going to be an explosion of bankruptcies. in 2022 and beyond? Or, did those payments and this flow of money solve the problem? I don’t know the answer to that, âPepper said.
âBefore COVID, bankruptcy filings were definitely down for ordinary people. Our business bankruptcies have been pretty stable. But for ordinary people it was down. Our population has shrunk,â Pepper said.
âA lot of people, a lot of coal miners who have lost their jobs have already filed their cases and are just retired or living unemployed. And there haven’t been so many – it’s a speculation on my part. – the [werenât] as many layoffs in ’17 and ’18 as there might have been before. “
Fluharty said this year “is really low nationally … the total for 2021 so far is around 300,000 cases for the first eight months. It’s down, down trend . Now I think it’s probably at or near its lowest point. I suspect it will start to go up. “
âThere is probably an increase in deposits on the horizon – I’m not sure where that horizon is. I normally say towards the end of next year. Maybe in 2023 you will probably see the deposits. I’ve seen this ebb and flow, ups and downs over the past 40 years a few times, âsaid Fluharty.
âThe last time it started going up, it went up and then fell over a period of 10 or 12 years, I guess, I guess. Then it will be at a low point for a while, and then it will start Now, part of the reason I think it’s going to start increasing is becauseâ¦ unless they extend it again, âFluharty said.
âAnd so you have people in this curious situation where they maybe make more money than they worked, and that has protected some people. But I think it’s probably about to run out. And also, the moratorium on evictions has helped a lot of people, and those are running out. So I suspect those numbers might start to go the other way, but I’m not entirely sure when that will be. Any expert that tries to tell you will be next June, they’re just guessing. It’ll probably be another year, 18 months, you’ll see the numbers go the other way, “Fluharty said.