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Unemployment rate could lead to more bankruptcy filings

The most recent data is showing that the number of people filing unemployment claims for the first time is down nationwide. However, here in New Jersey, that number rose an alarming 70 percent in one week. This influx of unemployed people in our state could cause a corresponding rise in bankruptcy filings over the next few months as it becomes more difficult for some people to pay their bills.

Between June 21 and June 28, 20,624 people in New Jersey filed for unemployment benefits for the first time. This is considered the largest increase in filings in the country. The previous week, that number was 12,045.

Some say this dramatic increase might be related to seasonal industries such as food service and accommodations. The downturn in business in Atlantic City is thought to be at least partially to blame. Many casinos are closed, and those that are open are running on thinner staffs than usual.

Others say that staff affected in those industries is not included in the 70 percent increase. It is believed that individuals who work for private companies who serve the public schools of the state are out of work now. The bankruptcy of a trucking company in the state could also be contributing to the rise in unemployed workers.

People can continue to debate the source of the rise in employment, but the fact remains that real people are struggling with their finances because they are out of work. Without gainful employment, individuals are often forced to turn to credit cards just to pay their bills. If the situation continues for any length of time, a person's financial situation could substantially deteriorate. Filing for bankruptcy could provide some much-needed relief and the opportunity to start over financially.

Source: nj.com, "First-time jobless claims jump in NJ, while the nation sees overall dip", Alexi Friedman, July 10, 2014

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