Nearly a year since coronavirus-related shutdowns began affecting large swaths of the American economy, more businesses are filing for bankruptcy as Chapter 11 filings were up nearly 20% in 2020 compared with the previous year, court records show.
Economists are predicting strong economic growth this year overall. But the bankruptcy data shows that despite $3.7 trillion in federal stimulus spending to combat the recession triggered by the pandemic, and an additional $1.9 trillion being proposed by President Joe Biden, businesses in certain industries have become particularly vulnerable and may take years to recover enough to pay their bills. Others will not recover at all.
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