Bankruptcies expected to soar, here's what you need to know

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Dothan, AL (WTVY)-- A longtime Dothan attorney predicts the number of bankruptcies will soar in the next few months as the economic fallout from coronavirus deepens. “The average wage earner is facing such dire times,” Collier Espy told WTVY on Tuesday.

The number of unemployed changes daily, but hundreds of thousands in Alabama have lost their jobs during the pandemic. More than a billion dollars in jobless benefits, the bulk coming from federal stimulus funds, have been paid to Alabamians in recent weeks.

Eventually, those payments, up to $875 weekly, will either run out or be reduced, forcing many to make tough decisions.

“I would say three to five months from now we'll see lots of bankruptcy filings,” Espy predicts. He said in his life, including over 40 years as an attorney, he's never seen things this bad.

His advice is to avoid bankruptcy, if possible, but also said sometimes there are no alternatives. “In my opinion (bankruptcy is) like surgery. You don't want surgery but if there is a condition that it's recommended to get better then (you have) surgery.”

For those unable to meet their monthly financial obligations, Espy suggests taking care of essentials first. He recommends keeping sufficient funds to pay for automobiles, groceries, and gasoline, and utilities. Credit cards can wait.

Generally speaking, lenders can't, at this time, foreclose on home mortgages and evictions are not permitted under emergency law. However, those restrictions likely won't last long.

Financial experts recommend working with lenders, many of whom have promised leniency for those experiencing financial difficulty.

Espy said, if bankruptcy is the only option there are several ways to file, including some that would allow repayment of debts but with more manageable terms.

Nationally, the jobless rate is estimated to range between 17 and 20 percent, the highest since the Great Depression.