LAS VEGAS (AP) — The pandemic may not have hit Nevada as hard economically as the Great Recession, based on bankruptcy filings.
Data shows bankruptcy filings last year were a little over a quarter of what they were more than 10 years ago, the Las Vegas Sun reported Monday.
Nevada residents made 30,000 bankruptcy filings in 2009 and 2010, according to the American Bankruptcy Institute. In 2021, the Institute shows there were 7,000. That’s the lowest yearly number since 5,500 filings were made in 2006.
Ryan Works, a Las Vegas area attorney who heads his firm’s bankruptcy, insolvency and financial restructuring division, was among those surprised _ even though the federal government gave money to people and businesses during the pandemic to keep them afloat.
“Most of us were predicting a massive influx,” Works said. “Certainly, things changed when we had trillions of dollars infused into the American economy. Loans, grants for small businesses and restaurants, all that money turned that upside down.”
Most bankruptcy cases in Nevada are liquidation bankruptcies called Chapter 7, where there is possible relief for consumer or medical debts. But typically “non-exempt” assets like homes or cars assets can be liquidated to meet creditors’ charges.
Ed Flynn, of the American Bankruptcy Institute, said it’s still possible that many personal and business bankruptcies are on the horizon nationwide.
“Right now, we’re getting an average of 7,000 cases per week,” Flynn said of national figures. “I’m not too convinced it will go up. Twenty years ago, we were in the range of 1.5 million per year.”
The factors that are likely helping people stay solvent include the temporary halt of student loan repayments and mortgage payback schedules.
There have also been various government protection and tax credit programs. Some business owners likely shuttered altogether rather than obtain bankruptcy protection. Also back in the late 2000s, people were losing wealth quickly.
“Housing prices went down by a third pretty much everywhere. Now, housing prices are up, the stock market is up, and employment is fairly high,” Flynn said. “This is different than the last time. In Nevada, I don’t think it’s going back up to 30,000 per year.”
Still with high gas prices, other inflation and federal student loan repayments possibly being in demand again, some bankruptcy attorneys are anticipating a sharp influx in cases.
Brian Shapiro, a Las Vegas attorney who serves as a bankruptcy trustee, said he believes people have been more stressed out than usual over the last two years.
“I just haven’t seen an increase in filings, but I still expect that they’ll come,” Shapiro said. “I don’t know how people are able to afford rent and gas with all this inflation. I have gotten a lot of consultants in the past year or so, but I just haven’t seen the filings.”