Experts Predict an Inevitable Wave of Evictions, Foreclosures & Bankruptcies

Is there going to be an overwhelming onslaught of consumer bankruptcy filings? Many experts are predicting an incredible surge in personal bankruptcy filings, caused by the economic disaster resulting from the Coronavirus Pandemic.

When the shutdown began bankruptcy filings sharply decreased. The Executive Director of the American Bankruptcy Institute, Amy Quackenboss predicted a surge, perhaps in May and June[1], but this didn’t happen. The delay in the surge is likely because most people don’t immediately file bankruptcy when they suffer a financial hardship. Loss of income will lead to falling behind on debt obligations, but many creditors offered forbearance for the first few months of the pandemic. But these solutions cannot last forever. (Here’s a list of creditors offering financial assistance.)[2]

These forbearance options have allowed most consumers to stay afloat for now. According to Transunion,[3] about 7% of auto and personal loans, 6.79% of mortgages and 3.57% of credit card accounts are in a payment relief program. “These relief programs, coupled with the government’s response to the economic fallout from the pandemic, including stimulus checks and boosted unemployment benefits, have kept delinquency rates low so far across the board,”[4] according to Transunion’s Vice President of Research and Consulting Matt Komos.

In Massachusetts, there are stronger protections for mortgage and rent obligations, with the enaction of Chapter 65: An Act For a Moratorium on Evictions and Foreclosures During the Covid-19 Emergency.[5] The Act established a moratorium on foreclosure and eviction proceedings, and allows residential homeowners to request a forbearance on mortgage payments with their mortgage holder. Those payments are moved to the end of the loan period, unless the homeowner agrees to an alternative repayment arrangement. The Act does not offer help with rent payments however, so once the moratorium lifts tenants may be facing an eviction if they are unable to catch up on rent payments. The moratorium was originally set to expire on August 17th, but has been extended by the Governor to October 17, 2020.[6]

The moratorium is keeping tenants in their homes for now, but when it ends the rent is still due. The Housing Court had an average of 7,653 eviction actions per quarter, but in early July had roughly 5,000 cases on hold due to the moratorium.[7] In the meantime, small landlords that rely on the rent for income are struggling themselves. Doug Quattrochi of Mass Landlords says about 5% of their members are unable to pay their bills, “and another 20% don’t know how they’re going to make ends meet at the end of this year.”[8] Bills in the state house and Congress are weighing different solutions to keep tenants in their homes and offer money for lost rent to landlords, but those solutions have not made progress at this point. One bill before the statehouse would create a “Covid-19 Housing Stability and Recovery Fund…to provide assistance to owners of residential units who were unable to pay housing and housing-related costs for reasons related directly or indirectly” to the pandemic.[9] The Coronavirus Relief Bill passed by the House of Representatives in May included $100 billion in low-rent support,[10] but as the Senate debates their quite different version of a new Relief package, it’s uncertain whether such assistance will be in the final version.

When clients come to MDRF for help, it’s after months to years of struggling to make ends meet. Bankruptcy is always the last resort. For those that have already been struggling and barely staying afloat, the Pandemic will likely be the final straw. Once these forbearances stop, and the financial assistance dries up, experts are predicting a tsunami of court actions, including evictions, foreclosures, collection actions, and so of course, bankruptcies.

If you are struggling with bills or are worried about how to stay afloat, contact us by calling 508-232-4633 or 866-831-0236. We offer free advice on your options for tackling your debt, and may also be able to provide direct legal assistance. You can also contact us through our website.



[1] Keshner, Andrew, “’It’s really a question of when.’” The Coronavirus pandemic is about to spawn a surge in bankruptcies, experts say.” Market Watch; April 2, 2020


[2] White, Alexandria, “Here’s our most up-to-date list of credit card financial assistance programs during coronavirus.” CNBC: July 24, 2020.


[3] Monthly Industry Snapshot, Transunion: June 2020


[4] Leonhardt, Megan, “Just over 7% of auto and personal loans are in financial hardship programs.” CNBC: July 24, 2020, Updated July 27, 2020.


[5] Chapter 65: An Act For a Moratorium on Evictions and Foreclosures During the Covid-19 Emergency, Mass. Session Laws 2020


[6] Buja, Melissa, “Mass. Gov. Baker Extends Moratorium on Evictions, Foreclosures Amid Pandemic.” NBC 10 Boston: July 21, 2020.


[7] Rios, Simon & Zea Tibisay, “Mass. Landlords and Tenants Are at Odds – But Agree on Need for Massive Infusion of Cash for Rent.” WBUR: July 6, 2020.


[8] Ibid.

[9] H. 4878 Massachusetts 191st Legislative Session


[10] Grisales, Claudia; Snell, Kelsey & Davis, Susan “House Passes $3 Trillion Coronavirus Relief Bill that Has Dim Future” WBUR: May 15, 2020.