The Labor Department claims that the number jobless workers applying for unemployment for the first time is steadily decreasing; but could that mean a spike in bankruptcy filings?
Initial claims for unemployment insurance rose by 17,000 to a seasonally adjusted 474,000, the Labor Department said Thursday. That was above analysts' expectations of 460,000 new claims... The number of people continuing to claim benefits fell by 303,000 to 5.16 million, the lowest level since February. The total unemployment benefit rolls have fallen in 11 of the past 12 weeks.
That number does not include the millions of Americans receiving unemployment benefits extensions that can last up to 73 additional weeks. But what about those workers who no longer qualify, exhaust their benefits or never qualified in the first place? We've spoken briefly about these vulnerable workers; but they are never really fully addressed by our lawmakers and politicians. As many pundits declare an end to the recession, many unemployed workers face bankruptcy because they cannot find a job and they cannot receive unemployment benefits that will pay their bills. This is the flipside of declining initial unemployment claims.
We cannot pretend that the economy is improving when we have more individuals (and businesses) filing for bankruptcy than immediately after the 2005 reforms. And these workers aren't filing bankruptcy because they want an "easy" way out as some critics would have you believe, they are filing bankruptcy because it's often the one thing standing between them and life on the streets. With no access to unemployment insurance, uncooperative creditors and pending foreclosure, bankruptcy becomes the legal savior of many Americans who suffer a job loss and don't have access to unemployment benefits.