This post is the second in a series about the most common causes of personal bankruptcy. The first post discussed medical expenses which is the number one reason for filing bankruptcy in the United States. And just like the sudden onset of illness, the second most common cause of bankruptcy is something that is out of most people’s control: job loss.
Unemployment and the Jobless Recovery
In October 2010, the unemployment rate rose to 10%; in other words, 1 out of 10 Americans were unemployed. As of November, 2012, the unemployment rate was listed at 7.7%. If you go strictly by the numbers, the “upside” is a decline of 2.3% in unemployment. The “downside” however is the fact this number doesn’t account for those who are no longer applying for or receiving unemployment. These folks, the “chronically” unemployed, no longer receive any types of benefits at all. For them the situation has not improved much, if at all, and actually may be far worse.
In today’s economy, when someone is laid off, the chance of finding a job in a reasonable amount of time is slim. The average duration of unemployment is 40 weeks. During that time the unemployed person must continue to meet their financial obligations such as housing, utilities, auto insurance, medical insurance, life insurance, credit card bills, and somehow put food on the table. When a person faces tough financial times they must make tough choices, such as using their extremely limited funds to either pay a credit card bill or feed their children. Most would agree that buying groceries to feed the family is the responsible choice. When suffering through a financial crisis such as this you need all the help and compassion you deserve, but just how likely is it for a big credit card company to suspend your payments for 40 weeks?
Getting Legal Help
If you are overwhelmed with debt as a result of a job loss, call Stephen Behm a Minnesota bankruptcy lawyer at Behm Law Group LTD. You can count on a Stephen Behm to treat you with the respect you deserve. Nobody ever sets out on their financial journey through life thinking they will need to declare bankruptcy. However, if you find yourself in a financial crisis and can’t find a way to satisfy all your creditors, bankruptcy can give you the second chance that you deserve.