Number of New Hampshire bankruptcy filings continues at ‘stunning’ lows

Bankruptcy filings in New Hampshire have sunk to three-decade lows for the last three months, coinciding with the highest unemployment rate since the Great Depression.

“The numbers are stunning,” said Malcolm P. Blackwood, a Manchester bankruptcy attorney. He said that bankruptcy numbers were already “at historic lows before this crisis.”

There only 81 bankruptcy filings in June, four more than in May, and the third double-digit filing in a row – something we haven’t seen since the late 1980s, save for three months following October 2005 when the law was changed to make it harder to file for protection.

The June number was a 42% decline from June 2019 and a far cry from the 443 filed at the same time during the last recession. It’s the lowest number filed in any June since 1988.

This decrease brings the monthly average down to 107 at the mid-year, nearly 28% below last year’s monthly average of 148.

So what is going on?

Blackwood thinks because of the pandemic “everyone is flush with cash.”

Those who were hanging on before, such as part-time workers, can now collect enhanced unemployment benefits –“making more money than they have seen in their lives,” said Blackwood – and since they go out less they have less opportunity to spend it.

Businesses are also being propped up by programs such as the Paycheck Protection Program.

“We throw all this money out there, and we are not just flattening the curve of the virus, we are definitely flattening the curve of economic calamity.  We are running on free money,” said Blackwood.

Similarly, the moratorium on foreclosures means that “people are not being squeezed, are not being pushed into filing for a long period.”

But now that much of the economic support may be ending, Blackwood expects a surge in bankruptcies.

He said he expects a lag of three to six months, but bankruptcies should start to go up – business-related debt first and then consumer debt.

Several national businesses have filed for bankruptcy since the pandemic began, including retailers JC Penney, Neiman Marcus and J. Crew and other companies like Hertz and the Chuck E Cheese family restaurant chain and several major oil and gas producers.

In June there were two bankruptcy filings involving business-related debt in New Hampshire, compared to three in May. One was filed as an individual.

The other was by Strikes and Gutters Ups and Downs LLC, dba CPR Cell Phone Repair, Bedford, which filed June 15, under Chapter 7. It reported assets of $13,615 and liabilities of $208,811.