Bankruptcy filings continue to fall in NH

Bankruptcy attorney Peter Tamposi

The continued eviction moratorium and a reluctance by banks to foreclose on mortgage holders has kept the number of bankruptcy filings down in the pandemic, says bankruptcy attorney Peter Tamposi.

Despite several high-profile national retail failures, bankruptcy filings in New Hampshire fell to another historic low in July.

But attorneys predict that the continued decrease in bankruptcy filings is only the calm before expected storm – unless that too is calmed by another massive federal infusion of aid, which is now being debated in Congress.

Seventy-two New Hampshire individuals filed for protection in July, nine fewer then June and the lowest number so far this year.

It was the fourth consecutive month with fewer than 100 filings, something that hasn’t seen since the late 1980s, save for three months following October 2005, after the bankruptcy law was changed to make it harder to file.

The number of filings in July 53% less than the number reported in July 2019 and a far cry from the 473 filed in July 2010, at the height of the last recession. It’s the lowest number reported in any July since 1988.

The decrease brought the monthly average number of filings so far this year to 102, nearly 31% below last year’s monthly average of 148.

But nationally, large-scale retail bankruptcies continue to be rolling in. Just on Sunday, Lord & Taylor and Tailored Brands Inc. – owner of Men’s Wearhouse, JoS. A. Bank, among other chains – filed for protection. But on the whole, bankruptcy filings have fallen nationally, though not by as much as in the Granite State, where no businesses directly filed for bankruptcy in July, although three individuals filed with business-related debt.

Peter Tamposi, a bankruptcy attorney in Nashua, offered three explanations for the trend in an e-mail to NH Business Review several weeks ago:

“1) The (Paycheck Protection Program) and other SBA loans have buoyed companies and kept them alive to get past the downturn in business. Many of those funds have run out and if business has not resumed, we’ll see a wave of failures in the fall;

“(2) Personal filings have been postponed by unemployment benefits, which have allowed many individuals to keep their heads above water. When that ultimately runs out, we’ll see a wave of individual filings;

“(3) Lenders and landlords have been willing to defer payments and in some cases are blocked by executive order and court closures from exercising their rights. Their patience will expire and courts will re-open, allowing creditors to begin collections and foreclosures and letting landlords begin evicting.

“I do not see a rosy future for many folks.”