Coming into 2021, there was no small amount of trepidation from economists and investors. Would another year of global strife continue to wreak havoc on businesses? What would people’s personal finances look like if the pandemic wasn’t curtailed? For a bankruptcy lawyer, these questions held more weight than simply being of interest — they would foretell how the practice would handle the next year.
Looking Back, Looking Forward
With our feet planted firmly in 2021, we have now had more than half a year to look back on the previous calendar year and parse through the data. Everyone remembers the general sense of doom and gloom that accompanied the early days of the pandemic and there were a lot of stories about the effect that the lockdown was having on marriages and bank accounts — none of it good. As we dive into each category, we’ll take a look at where we came from and try and see if we can predict where we’ll end up.
Divorce
As the year was progressing, many law firms around the country went on record with their opinion that 2020 might see the biggest spike in divorce over a 12-month period in over a decade. Certainly, a Utah divorce attorney might feel similarly when looking at the state’s divorce statistics when compared to the rest of the country.
- Over the past 20 years, Utah has ranked in the top 5 states with the highest divorce rate, at just under 4 per 1,000 homes.
- Utah also ranks in the top 10 states with the highest rate of divorces for women, at just under 10 per 1,000 women.
- Post-lockdown, certain regions around the country recorded a 20-30% increase in domestic violence arrests.
The Prediction
With such dire statistics coming into 2020, one might reasonably expect the next year to be replete with unhappy couples and for every Utah divorce attorney to be up to their eyeballs in filings. Strangely (and happily), the data shows otherwise.
- Divorces hit their lowest number of filings in 50 years back in 2019.
- Census polls taken in 2020 show that 58% of Americans value their spouse more during the pandemic and admit that the marriage has deepened.
- Analysts think the declining number of divorce rates will continue throughout the rest of 2021, but some divorce attorney outliers think that the anticipated surge of divorces will occur once the pandemic slows down and people feel comfortable leaving their homes.
Bankruptcy
Unlike divorce, which has been declining steadily for almost half a century, bankruptcy numbers stay relatively stable year-over-year. Once again, the prevailing attitude throughout the pandemic was that things must be truly dire for households if the business sector was anything to go by, with so many shops closing their doors for good.
- For nearly five years, total filings — either individually or with the help of a bankruptcy lawyer — have held firm at just over 700,000 per annum.
- The need for a chapter 13 attorney has been high, with nearly 300,000 filings a year.
- Business filings have historically been trending around 25,000 bankruptcies a year.
The Prediction
In another interesting turn of events, 2020 saw much fewer bankruptcy filings than was anticipated. Naturally, the debate still rages over whether or not that will continue throughout the rest of 2021. The numbers may continue to surprise on that front.
- Despite the pandemic, bankruptcy cases dropped 30% last year by almost every metric.
- Instead of searching for a good chapter 13 attorney, chapter 11 ended up seeing an increase, going up nearly 19%. Of that total, nearly 8,000 filings involved businesses.
- The trend has continued well into 2021, with total filings having dropped an additional 29% by the end of May.
Of course, there is debate as to whether these bankruptcy and divorce rates prove a darker future wherein the pendulum will swing back sharper in order to make up for those absent filings. Only time will tell. Most analysts agree, however, that 2021 seems to “be in the clear” for the rest of the year, as the data hasn’t begun to really plateau yet.
At Rulon T. Burton and Associates, we are both optimistic and pragmatic. We look at the numbers and see that there is a silver lining in everything. We also humbly submit our number just in case the numbers tell a different story next year.