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   multi-trillion-dollar programs ... they’re the only thing that’s sus- taining us. Without that, the whole house of cards would collapse.”
To further state his case — that’s an industry term — Cress pointed to numbers contained in an analysis authored by Morning Consult economist John Leer, who noted that, without additional funding, millions of unemployed Americans are at risk of financial insolvency by the end of this month.
“The personal finances of workers who have been laid off or placed on temporary leave since the onset of the pandemic dete- riorated in July,” Leer wrote. “The July survey found that 29% of unemployed and furloughed workers lacked adequate savings to pay for their basic living expenses for the month, up 16% in June. This monthly change contrasts with June, when the finances of laid- off and furloughed workers improved. At that point in time, many renters and homeowners took advantage of the rent-deferral and
   Mark Cress says the new ‘fast-pass’ bankruptcy process may be a viable option for some, but the process doesn’t leave business owners much time to create a reorganization plan.
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mortgage-forbearance options included in the CARES Act, thereby driving down their monthly expenses.”
Cress backed up that commentary with some other, very sober- ing numbers regarding renters.
“One-third of all renters weren’t able to make their July rent,”
he noted. “And more than 60% were concerned they won’t make August. So you can imagine the ripple effects this will have ... many small-time landlords, with one or two tenants, may not be able to pay their mortgage.
“I think the dam is
about to break — we’re
on the cusp of a tsunami
of bankruptcies. It hasn’t happened yet, but it’s going to happen.”
“And you if get enough defaulted mortgages ... then banks start to pull
in their horns, and all of a sudden the credit markets freeze up, and you have a real disaster,” he went on, drawing anal- ogies, again, to what happened nine decades ago.
Looking at these statistics and possi- ble scenarios, it’s easy to see why bank- ruptcy lawyers are expecting a wave, or tsunami, of personal bankruptcies to hit this area — and the nation as a whole — soon, with ‘soon’ being a relative term.
“Some people are getting unemploy- ment benefits, but it looks like that’s
       ending,” said Weiss. “There’s a foreclosure and eviction moratorium that’s ending in October, and there are already people living on credit cards and exhausting their savings just trying to get through this — and it’s going to be a while before jobs come back.
“So it’s a matter of sooner than later,” he went on. “And bank- ruptcy is something of a trailing indicator; it takes people a while to get the point where they need to file for bankruptcy — the credit- card bills don’t become
 BusinessWest
LAW AUGUST 17, 2020 55
unmanageable until sev- Bankruptcy
eral months go by.”
Continued on page 61
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