Many parts of Florida were recently devastated by Hurricanes. Despite the Government programs and social services in place to help hurricane and disaster victims. Studies examining all eighteen hurricanes that hit the fifty United States between 1980 and 2004 and that caused $1 billion or more in damages, show bankruptcy rates in the disaster areas seem to increase, more than areas that were not directly affected by the storms.
Prior studies on financial affects after disasters were limited to short term after the disaster. This led to skewed data because the short term after a disaster actually produces a spike in financial market due to all the rebuilding. However, when you look at a longer-term post-hurricane, we find the short-term help provided to victims does not prevent ultimate financial ruin for those victims.
A study by a professor out of Harvard dug into the issue and found that there was a correlation between natural disasters and bankruptcy filings. Professor Lawless discovered that in the three years following a hurricane, the growth in bankruptcy filings is about 50 percent higher in states that have suffered a direct hit as compared to the areas not affected by the storms.
It is not surprising that families often struggle with financial obligations after a hurricane. These storms can cause massive damage to property, annihilating homes, vehicles and even destroying places of employment. Unfortunately, financial obligations for paying off mortgages and loans do not disappear when the home is destroyed, or the vehicle lost. Insurance policies may not offer enough relief. These policies often cover wind damage with high deductibles, but not damage caused by flooding, which requires a separate flood policy. Since hurricanes can cause flooding in areas not typically prone to flooding, many people lack that coverage.
As such, it is not surprising that a hurricane can lead to financial ruin. This leads some professionals to question whether the storms also result in an increase in bankruptcy filings. A study by a professor out of Harvard dug into the issue, finding that there was a correlation between natural disasters and bankruptcy filings. Interestingly, she found that the filings often peaked three years after the event. The professor continues, extrapolating from this data that families appear to attempt to get back on their feet as best they can before realizing their financial struggles are too much to manage. At this point, they move forward with a petition for relief through bankruptcy.
Waiting too long to file bankruptcy can negatively affect the relief you can obtain, and the fresh start needed. If you think there is a chance you may not recover financially from hurricane damage, you should seek advise from a bankruptcy attorney. Even if you do not need to file right away, having that consultation could prevent you from making mistakes should the need arise in the future. If you are facing financial distress, contact Holland Law Group to see if bankruptcy is a good option for you. Bankruptcy is not appropriate for everybody, obtain a free consultation to see if bankruptcy can help you. Serving the Gold Coast to the Treasure Coast, Holland Law Group is your partner in Law.