Waiting for the Flood

    I keep hearing that Bankruptcy cases are about to soar.  I heard it when the government stopped stimulus checks. Nothing happened.  I heard it when the mortgage foreclosure moratorium and eviction moratoriums expired. Crickets.  So what’s up?

    I think two factors are at play.  First, there is natural denial and procrastination.  People get frozen into inertia.  That’s fairly normal in our field. Once the cow patties actually hit the fan, they panic and manage to get to our offices as an emergency case.  The second factor, however, is somewhat newer - i.e., severe entitlement syndrome. There is a delusional expectation that the government will bail them out again. This is combined with a political belief that the government is bad, yet owes them something merely because they exist. For example, pay without work. Such a concept would seem laughable, except some political candidates are promising exactly such a scheme, called "basic income."

    Everywhere you go, you see the “Help Wanted” signs. Month after month, the signs remain posted. Even with bonuses offered, and with $15 minimum wage, people are not returning to work. It’s not the COVID-19 virus - it’s the “I’m too good for this” virus. 

    I try to understand the logic of those who think I must help them for free simply because they have no money.  After all, I’m a lawyer, so I must be rich and can afford to subsidize their bankruptcy out of my own pocket. Oh, and how dare I suggest they sell or give back their blinged-out Hummers on which they still owe 80 payments? They need it for work at their non-existent or "off the books" jobs (which they insist I must not report). They get angry at me when I wake them up to to the reality that the bankruptcy judge doesn’t like it when you drive a better car than he does.  I don’t know how these people survive when the credit cards are finally all maxed out, but they do.  

    In any event, the trickle of new cases is likely to remain so for some time.  A lot of homeowners are going to lose their homes because the arrears has finally gotten too high to cure or interest rates will rise to a point where no credit agency will approve their loan, not even to steal their equity. 

    In other words, COVID-19 was only the tip of the iceberg. The worst may be yet to come.  

    I may be in the right field, but, unfortunately, I’m in the wrong time.