With the loss of federal support programs because of a stalemate in DC negotiations on a new coronavirus relief bill, Maine business and government officials fear that a wave of bankruptcies will overtake the state and cripple its economy, the Portland Press-Herald reports.
Sharing a fear of people around the country, Maine has seen an uncharacteristic drop in the number of bankruptcies filed since the start of the pandemic–and the start of pandemic aid–in March. Bankruptcies are down 50% through August, compared to last year.
However, with no additional aid coming for individuals, businesses, local governments or nonprofits in the foreseeable future, bankruptcies are expected to jump in the coming months as courts reopen and eviction moratoriums end.
“Now that the money has been cut off, you are going to see things become more difficult for people,” James Molleur, a bankruptcy lawyer in southern Maine, told the Press Herald. “People do not tend to file for bankruptcy when things are getting worse; they file when they hit bottom. I don’t think we’re there yet.”