The Labor Department reports that there are officially 13 million Americans out of work; but if you were to count those who have given up on finding a job unemployment numbers would rise even higher. One of the ironic effects of high unemployment has been that fewer Americans are using credit cards. The decline in credit card usage as been celebrated as a sign that not only is the economy recovering but that Americans are finally getting frugal. But this assumption doesn't reflect the reality on the street. Unemployed Americans typically aren't using credit cards because they have either already defaulted or they simply cannot access any new credit.
People without jobs are aren't able to save money, pay their bills or buy products and services. Many of them need to seek the protection of bankruptcy just so they can keep a roof over their head. And unemployment after bankruptcy can increase their risk if falling into more debt troubles or and filing a second bankruptcy several years down the road if they don't make the right financial moves right away.
Unemployed Americans facing debt troubles need to be informed that filing bankruptcy is often one o the best moves they can make to protect the assets they still have after a job loss. Bankruptcy can protect their retirement accounts and free up cash so they can maintain much needed health insurance, rent payments and other life critical expenses. Negotiating forbearance agreements and repayment plans on debts that survive bankruptcy can go a long way in combating the effects of long-term unemployment. Many creditors such as the IRS and student loan issuers are more than willing to work with unemployed debtors.