The new year has not been kind to the people of southern California. As many across the globe were celebrating the start of 2018, multiple wildfires were raging across the Golden State. And as if those fires weren’t enough, the damage they left behind has created a derivative problem with massive mudslides taking out houses, cars, and virtually anything else in their path.
Between the fires and the mudslides, the damage that has been done to many communities in southern California is massive. Thousands and thousands of people are going to spend the rest of the year attempting to pick up the pieces and put their lives back together, which is definitely going to have a severe impact on the local debt collection industry.
Impact on Victims
The most obvious people who are going to be impacted by the carnage caused by the fires and mudslides will be the direct victims. People who lost their houses will have also lost just about everything in those houses, and many vehicles have been rendered completely useless as a result of the damage.
These victims are going to be getting hit on all sides financially. It is likely that they will be forced to take time off of work to get their lives back together, but they also have little incentive to continue making payments on houses and vehicles that no longer exist. Instead, they will likely be waiting for help from insurance companies.
In the face of such devastating damage, making payments on small lines of credit with local businesses will be easily overlooked for most victims for months to come.
Impact on Residents
Southern California residents who were fortunate enough to avoid any fire or mud damage will only be in a slightly better position financially than their less-fortunate neighbors. And with everyone in this part of the state focused on pitching in to clean up and rebuild, it is possible that income levels will drop while residents miss work, which will impact their ability to spend money and honor their commitments.
Many residents who dodged first-hand damage will still be without water for quite a while, and almost all of these people will be struggling to help their friends and relatives who were not quite so fortunate.
Impact on Businesses
While most of the focus of the media coverage has been on homes and vehicles that were damaged, there are also plenty of local businesses that have seen their entire operation disappear overnight. And much like local residents, the businesses who were lucky enough to avoid any damage are still going to suffer from the fact that it will be months before Southern California is back to “business as usual.”
With their ability to operate in question, many businesses will have trouble honoring any commitments they have made, which could result in a massive spike in delinquent accounts for commercial debt collectors.
Disruptive to Tourists
Another way that the fires and mudslides will impact debt collections in Southern California is that there will be a large drop in the number of tourists coming out to the Golden State for their vacations this year. With so much damage caused by the fires, tourists will make a point to stay away, which could have a severe impact on local businesses who are counting on that tourist revenue.
The biggest problem with wildfires and mudslides is that the news will stop covering them as soon as the fires are out and the mudslides have stopped. However, that is actually just the beginning of the real impact, which will be the months and months of cleanup that will impact victims, residents, business, and tourists for the rest of 2018.