The COVID-19 pandemic has not only claimed lives, but also livelihoods. Many companies and individuals are about to go bankrupt.
Financial experts have predicted a “tsunami” of bankruptcy filings, but thanks to government support in the form of stimulus controls, corporate loans and moratoriums on lending, the great tidal wave is rolling more slowly than expected.
Lamar Hawkins, a lawyer at Guidant Law, tells ABC15, at this point he sees many small businesses filing for bankruptcy.
Enough to keep him working 12-14 hours a day, and Hawkins predicted that there would be a wave of individual sign-ups.
One of his clients was motel owner Robert McDowell. McDowell owns the Canyon End Motel in Meadview, Arizona.
The city is located on the edge of the Grand Canyon at Lake Mead.
“This place did well. It’s in a fantastic location,” said McDowell, who stated that he bought it as an investment, with the goal of turning the motel around to make it profitable and eventually reselling it one day. .
McDowell and his wife had fallen in love with the scenic area and the wonderful people in the community.
“We’ve doubled sales here. We had people here from 39 countries around the world because we’re right there where the Grand Canyon ends, so they’re coming to the Sky Walk in the Hualapai nation,” McDowell said.
The motel was fully booked nine months in advance at the start of the year, but on March 15, 2020, the world as they knew it came to a standstill.
“Unfortunately, President Trump had to restrict flights from Europe and other parts of the world, and it was like turning off a fire hose. Everything just stopped cold,” McDowell said.
The Hualapai nation closed their roads to visitors and businesses closed their doors due to the COVID-19 pandemic. Governor Doug Ducey then closed off the Grand Canyon.
McDowell said the pandemic brought uncertainty and left him feeling helpless because there was nothing he could do.
“Nobody wants to file for bankruptcy unless they have to. It’s really someone’s last resort,” McDowell said.
“Bankruptcy was the last resort. There are all kinds of shame and stigma that come with it,” he added.
McDowell decided to file a file saying it was the only way to save his motel.
Thanks to a new law passed in 2020, he was able to take advantage of sub-chapter 5.
The law has been a life raft for small businesses trying to survive. It’s a way of paying back your creditors over time, rather than giving up your assets immediately.
You can read more about subchapter 5 by clicking here.