South Bay lawyers predict surge in bankruptcies as stimulus money dries up

South Bay attorneys are bracing for a wave of new bankruptcies from individuals and small businesses that have exhausted their unemployment benefits and federal stimulus money.

The number of cases filed in the United States Bankruptcy Court’s San Jose division has declined precipitously over the past five years — plummeting more than 35 percent to 2,718 last year as compared to 4,238 cases in 2015. That downward trend extended into 2020 with 1,391 cases filed in the first eight months of the year compared to 1,845 cases over the same time period in 2019.