The COVID-19 pandemic and the economic hardships it is causing will likely result in a wave of personal, farm and small-business bankruptcies in South Dakota in the coming months that may lead to a wider economic crisis spurred by the coronavirus.
So far, federal aid and unemployment programs, and several months of restricted access to the court system, have delayed a rise in bankruptcies from showing up in court filings.
But increased rates of unemployment, reduced incomes of people at all levels of the economy and a coming debt crisis will all play a role in the anticipated bankruptcy storm that could affect a wide range of individuals and businesses, including people who long saw themselves as financially stable.
As federal assistance programs expire, and private lenders start seeking back payments on home and car loans, experts say many people in financially vulnerable positions will soon find that the debt they took on during the worst of the pandemic has become too much to handle.
A rising wave of bankruptcies could lengthen the pandemic’s economic recession as consumer spending falls off.