The COVID-19 economic crisis: American job loss + when to declare bankruptcy
Losing your job is a devastating hardship to face, and in the past year, Americans have experienced an unprecedented spike in both job loss and personal suffering as the Coronavirus pandemic rages on.
Many have experienced seemingly irreparable damage to their health, career, and more this year, with 22 million American jobs lost due to Covid-19. A year into the pandemic, there isn’t a household that has been spared from the illness or death of a family member, friend, or co-worker.
On top of rising death rates, there has been a rise in economic hardship and related repercussions such as business closure, unemployment, and a rise in depression or thoughts of self-harm. Let’s further explore the economic impact of the pandemic and how it is affecting American lives, businesses, and finances.
Economic impact of American job loss
Experts suggest it could take up to 4 years for employment to recover fully from the world enduring catastrophic job loss. Industries that depend on the gathering of large groups, such as restaurants, entertainment, and tourism are the hardest hit and may take even longer to recover. Many small mom-and-pop shops have had to face layoffs, financial strains, and even bankruptcy.
However, with new assistance and relief packages passing through congress, and vaccinations on the rise, it may seem like American workers will soon be back on their feet. If you are a hard-working laid-off employee or small business owner who has been hit hard by the pandemic, deciding the next best step for you, your family, and your business can be complicated.
Though it’s looked at as an unfavorable last resort, many Americans facing this type of economic downfall are forced to consider filing for bankruptcy. And the reality behind bankruptcy is that it’s not as bad as most people tend to think.
Let’s discuss what it means to file for bankruptcy, and whether this is the right choice for you.
When to declare bankruptcy
There are many different reasons why an individual may consider filing for bankruptcy. The leading causes of bankruptcy are job loss and medical debt. In the middle of a pandemic, it’s easy to see why bankruptcy rates are high in Mississippi and other states across the country due to job loss, decrease in small business revenue, and unprecedented medical emergencies and hospitalizations. When you’ve exhausted all options, bankruptcy is an avenue that can help you get back on track with your finances.
Declaring bankruptcy is a personal choice, and has the potential to be beneficial for both you and your business. If you’re looking to stop the endless calls from creditors and bill collectors during the pandemic, declaring bankruptcy can feel like a weight lifted off of your shoulders. If you are unemployed, drowning in medical debt, or facing the closure of your small business, it may be time to call a bankruptcy lawyer.
While filing for bankruptcy may feel bleak and difficult, there is good news. President Biden recently signed an extension on the Bankruptcy Relief Extension Act, which can help small business owners stay open and keep employees on the payroll while going through bankruptcy and exploring options with their creditors.
Once you have contacted a bankruptcy law firm to work alongside you, discuss with your lawyer what the Bankruptcy Relief Extension Act and the Small Business Reorganization Act can do for you and your small business as you assess how to move forward with your financial situation.
If you are in the middle of filing or considering whether you should declare bankruptcy, you’re not alone. From unprecedented job loss to family illness and hospitalizations, this year has been a trial for all Americans.
There shouldn’t be a stigma attached to filing for unemployment or declaring bankruptcy in the midst of a global economic disaster. Consider talking to a trusted bankruptcy lawyer today to explore your financial options and take that next step to return to an even better version of “normal.”
Story by Bilal Sajjad. Sajjad is a full-time writer who loves to write about home improvement, buy and sell new homes and is good at writing about property as well.