The U.S. workforce has been struggling financially for months since the outbreak of the novel coronavirus. Millions of consumers have either lost their jobs or taken huge pay cuts. For businesses, the outcome has been similar. Many companies have filed for bankruptcy as a result of a significant decrease in revenue and halted operations.
In Illinois, the economic situation has been particularly cumbersome for businesses, including longtime retail icon Lord & Taylor. Just last week, USAttorneys.com reported on the retailer’s Chapter 11 bankruptcy filing, submitted on August 2nd, and consequent store closures in Connecticut. Unfortunately, the brand has continued to sustain revenue losses and recently announced plans to close stores in Illinois.
Lord & Taylor opened its flagship store in New York back in 1914. The company was subsequently bought out by Le Tote, an online women’s retail business, in November 2019. Le Tote also filed for Chapter 11 bankruptcy protection on August 2nd, citing the coronavirus pandemic as the reason for their debts.
The Effects of COVID-19 on Department Stores
Lord & Taylor isn’t the only department store chain to file for bankruptcy as a result of COVID-19. Other notable retailers who have felt the brunt of the pandemic’s effects include:
- Neiman Marcus
- J.C. Penney
- J Crew
- Lucky Brand
- Pier 1
- Brooks Brothers
- True Religion
That list represents just a fraction of previously top-named retailers in the United States who have suffered major financial losses due to the coronavirus outbreak. After being mandated to close shop for several months, many businesses have been unable to keep up with their costs. Some Illinois stores have faced foreclosure as well because they can’t afford to pay their property loans.
Filing for Bankruptcy in Illinois
Bankruptcy is a federal process that can either eliminate or reduce a consumer or business’ debts. Individuals in Illinois can file for Chapter 7 or Chapter 13 bankruptcy protection. Chapter 7 liquidates a consumer’s debts and stays on their credit report for 10 years. Chapter 13 reorganizes a consumer’s debts so they can pay back a portion of what they owe over a three-to-five year course and remains on their credit report for 7 years. Businesses can also file under Chapter 7 or the equivalent of Chapter 13, which is Chapter 11 (the Chapter Lord & Taylor filed under).
Regardless of whether you are an individual or a corporation, if you have amassed debts to the point that you can’t comfortably pay your monthly dues, bankruptcy may be the best option for you. However, it’s important to remember that everyone’s financial situations differ and the filing process can vary for each applicant. To ensure you have all the information you need and file all your documents accurately, it is in your best interest to consult with an Illinois bankruptcy lawyer for help before you default on your debt payments.