High Profile Business Bankruptcies in 2020 Take a Toll on Individuals

Throughout the United States, the COVID-19 pandemic and other factors have contributed to more than 600 corporate bankruptcies during 2020. Retailers, energy suppliers and health-care providers faced particularly intense challenges, but nearly every sector of the economy has been hurt by the lockdowns, outbreaks and fears that have affected the country for most of the year. J.C. Penney, Hertz, Quorum Health, Frontier Communications and 24 Hour Fitness Worldwide are among the prominent companies that have sought relief from creditors.

Many struggling businesses have worked to keep their doors open through a Chapter 11 restructuring, while others have shut down completely after filing for Chapter 7 bankruptcy. This wave of commercial bankruptcies puts the financial health of many individuals at risk, including:

• Workers at bankrupt companies — Unfortunately, businesses facing financial pressure often look to cut payroll in order to stabilize their situation. Even if a company continues operations while seeking protection from creditors, it might terminate employees as part of a Chapter 11 reorganization.
• Owners and employees of nearby businesses — Thriving communities have multiple businesses that complement each other. A closed factory, store or office can also threaten nearby establishments where employees went to eat, shop or work out. The ripple effect from one business that goes under could lead to a string of other closures and worker terminations.
• Customers and suppliers of struggling operations — A major retailer’s decision to shut down presents a serious challenge to potentially hundreds of suppliers that rely on the store to market their goods. Likewise, customers of companies that deliver internet, energy or transportation services could face hardship if they’re forced to switch providers suddenly.

Individuals and families who are overwhelmed by debt should understand that bankruptcy is an important tool that some of the country’s largest companies have used to regain their financial footing. When you speak with a qualified bankruptcy attorney, you’ll learn if you can benefit by filing for this type of legal debt relief. Once you’ve had an honest discussion with a knowledgeable lawyer, you can make informed decisions about the steps you can take to protect you and your loved ones.

Weiss, Schmidgall and Hires, P.C. works with Indiana individuals and businesses to deliver effective, lasting financial solutions through the bankruptcy process. For a free initial consultation with one of our attorneys, please call 219-293-8988 or contact us online. We are located in Merrillville.