Tag Archives: Long Term Unemployment

Avoiding Consequences of Long-Term Unemployment through Bankruptcy

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Sustained high unemployment has permanently changed our economy, and the middle class must change to keep up.

This situation is not entirely new; for example, unemployment peaked at 10.8% in 1982. But then, the jobless could count on unemployment benefits and other government benefits to tide them over. The unemployment rate quickly went back down once the economy recovered, and the system worked. This time, long-term unemployment has overwhelmed government benefit programs designed to provide short-term relief, and the government has no money for new relief efforts. The result is that many American families are in an almost untenable financial position.

Many have been forced to liquidate their savings just to stay afloat. Once the savings run out, they sink. A proactive bankruptcy may be the answer to this dilemma.

Proactive bankruptcy

Some people hesitate to file bankruptcy because they are afraid that they will lose everything, but that is simply not the case. By the time they file, it may be too late to take advantage of the financial fresh start that bankruptcy affords.

Assume that you are over age 50, and become unemployed. There is a real possibility that you may be unemployed for a number of months and/or you may have to adjust to a permanently lower standard of living. Instead of cashing in your 401k to pay bills, Chapter 7 bankruptcy may be a better option.

Chapter 7 can eliminate most or all of your unsecured debt, thus minimizing the bills you have to pay and giving you more time above water. You can then focus on keeping your secured debt current, and preserve the money in your retirement nest egg as opposed to giving it to credit card companies and debt-buyers.

If you are facing long-term unemployment, Chapter 7 bankruptcy can give you the time you need to work things out. For a free consultation with attorneys who understand how bankruptcy works, contact our office. Follow us on Twitter @Faro_Crowder.


Giving a Face to the Long-Term Unemployed

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Florida has more long-term unemployed workers than almost any other state in the country.

A recent report gave more identity to the long-term unemployed, or those who have been jobless for more than 26 weeks. In Florida, Alaska, California, Illinois, North Carolina, New York, Connecticut and Rhode Island, between 46% and 60% of the jobless are long-term unemployed. 14% of these workers were in wholesale or retail trade; services, hospitality and manufacturing workers were also in double-digits. Statistically speaking, most of these displaced employees are between 25 and 34.

In his most recent State of the Union speech, President Barak Obama highlighted long-term unemployed and asked that American companies not discriminate against the jobless when making hiring decisions.

Unemployment and bankruptcy

Many jobless turn to seasonal work or day-labor in an attempt to keep some money coming in. In terms of motivations for filing bankruptcy, unemployment has taken a back seat to medical bills in recent years. Nonetheless, the unemployed are still highly at-risk for filing bankruptcy:

  • When cash becomes scarce, many families begin borrowing money to make ends meet. Many times, this debt is credit cards or perhaps payday loans.
  • Other families stop paying their unsecured debts altogether and commit all their funds to secured debts.
  • A near-universal effect is that families liquidate their savings, making them very vulnerable to financial emergencies.

Factors that lead to a bankruptcy filing, such as medical bills and unemployment, are hardly ever your fault. But, you must still take charge of the situation to keep it from getting worse. Consumer bankruptcy can eliminate excess debt and get you back on the right track.

To take charge of your pocketbook, contact us for your free consultation.


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