Because of the historic economic impact of COVID-19, economists are predicting a “tsunami” of personal bankruptcy filings. Well-known businesses like J. Crew, Beall’s, Goody’s, Gold’s Gym and Neiman Marcus recently filed for bankruptcy protection. Most major airlines could face bankruptcy without a government bailout.
Americans who have become used to using credit cards as a stop-gap measure to survive pay-cuts might not be able to rely on this method since nearly 50 million Americans just had their credit card limits cut.
For centuries, companies have used bankruptcy as a tool to survive, reorganize or to shut-down. Several airlines have filed bankruptcy over the past three decades, primarily to break contracts and modify pensions.