This crisis, however, has yet to roll over into a second wave of consumer bankruptcy filings, with fewer than 40,000 reported in April – a ten-year low for the month. .

While businesses and individuals can declare bankruptcy, individuals make up the vast majority of filings.

Due to the high correlation between unemployment and consumer bankruptcy, a surge of filings can be expected in the coming weeks.

Considering the current drastic unemployment spike, a bankruptcy surge is almost certain to follow. .

Another risk that could make the bankruptcy wave worse is if creditors use the same playbook from the financial crisis to deal with struggling borrowers.

If creditors respond to the disruption by simply raising interest rates and restricting risky debt, making it more difficult for low-income individuals to qualify for credit cards and loans it  would prevent the borrowers who need credit most from receiving it.

While job losses during this crisis were created by necessary social distancing measures – not market failure, as with during previous recessions – the bankruptcy rate will soon reflect the unemployment rate, but the response from creditors and policymakers will likely determine just how large the wave will get.