The COVID-19 pandemic has not only claimed lives, but also claimed livelihoods. Many businesses and individuals are on the verge of bankruptcy.
Financial experts have predicted a “tsunami” of bankruptcy applications, but thanks to government help in the form of stimulus controls, corporate loans and moratoriums on evictions, the big wave has been slowing down than expected.
Lamar Hawkins, a lawyer for Guidant Law, tells ABC15 that right now he sees many small businesses going bankrupt.
Enough to keep him at work for 12-14 hours a day and Hawkins predicted it would be a wave of individual requests.
One of his guests was motel owner Robert McDowell. McDowell owns Canyon’s End Motel in Meadview, Arizona.
The city is located on the banks of the Grand Canyon next to Lake Mead.
“This place worked well. It’s in a great location,” McDowell said, claiming he had bought it as an investment, with the goal of turning the motel around to be profitable and eventually resell it someday. .
McDowell and his wife had fallen in love with the stage area and the wonderful people in the community.
“We’ve doubled the business here. We had people from 39 countries staying here from all over the world because we’re right where the Grand Canyon ends, so they come to see the Sky Walk in the Hualapai Nation,” McDowell said.
The motel had been booked nine months in advance earlier this year, but on March 15, 2020 the world, as I knew it, stopped.
“Unfortunately, President Trump had to restrict flights from Europe and other parts of the world, and it was like turning off a fire hose. It all got cold,” McDowell said.
The Hualapai nation closed its roads to visitors and closed businesses due to the COVID-19 pandemic. Governor Doug Ducey closed the Grand Canyon.
McDowell said the pandemic caused uncertainty and made him feel helpless, as he could do nothing.
“No one wants to file for bankruptcy unless they have to. It’s really the last resort for anyone,” McDowell said.
“Bankruptcy was the last resort. There is all kinds of shame and stigma,” he added.
McDowell decided to show up because, according to him, it was the only way he knew how to save his motel.
Thanks to a new law passed in 2020, it was able to take advantage of subchapter 5.
The law has been a lifeline for small businesses trying to stay afloat. It is a way to pay off your creditors over time, rather than giving up your assets immediately.
You can learn more about subchapter 5 by clicking here.