Many analysts suspect that unemployment benefits will not be extended and already millions of Americans have exhausted their access to those benefits. Many of these so-called 99ers are at the end of their rope and are deciding to exhaust all of their resources including retirement accounts without considering the long-term consequences of doing so. Here's a perfect example of what happens when unemployed individuals exhaust all of their resources trying to survive long-term unemployment:
Fred Johnson has been searching for a job since he was laid off as human resources director for an architecture firm in 2008. His unemployment benefits ran out in June and he is pretty much tapped out.
"I have nothing left," said Johnson, who seeks a position in human resources or office management. "I've tapped 401(k)s, annuities, life insurance, everything. Now, I have a good chance of losing my house with only four years left to pay."
Depending on his age, it may be extremely difficult for Fred to recover from liquidating all of his assets. Fred's story is a sad one indeed; but this unemployed person may have had other choices that he did not consider. With only four years to pay on his mortgage, it may have been wise for Fred to discharge his unsecured debts in bankruptcy and focus any income he had on paying his mortgage and other secured debts. Now as it stands, this debtor may end up still losing his home to foreclosure and as we have mentioned in the past, banks are eager to get their hands on the equity rich properties of some homeowners facing foreclosure.