Unemployment Can Quickly Hurt Your Household Budget

In recent months, many people in Indiana and across the United States have been on a roller coaster when it came to employment. Some people were temporarily furloughed, others had reduced hours, and others lost their jobs completely. Some households had multiple wage earners experience unemployment, and others could not work due to illness or exposure to a person with COVID-19.

While unemployment benefits can help replace some income, it is often not enough to keep a household on track with its budget while one or more people are out of work. Even a brief period without income can completely throw off a household budget, and it can be difficult to recover financially. If your household finances have suffered due to unemployment in 2020, you should not wait to learn about your options from an Indiana bankruptcy lawyer. 

Falling Behind on Bills

Many households in Indiana have tight budgets that depend on a specific amount of income per month. If your income is affected by unemployment – no matter how brief – it can cause you to fall behind on certain bills and expenses. Once you are behind, it can be difficult to catch back up, even after you start back to work. Creditor and collection calls and letters can start quickly, and you might face possible utility shut-offs, eviction, repossession of a car, or even the foreclosure of your home. Credit card companies can file lawsuits if you default, and these lawsuits can lead to wage garnishments and other financial consequences. Falling behind on bills can have serious effects faster than you might imagine.  

Racking Up Credit Card Debt

When some people cannot afford to cover their bills due to unemployment, they might be tempted to turn to credit cards for help. It might seem like a viable solution when you begin charging your bills and other expenses to your credit cards, though these balances can add up quicker than you might imagine. Before you know it, you can be over your head in credit card debt, and interest can prevent you from making a dent in your balances, even after you are employed again. 

Spending Your Savings

Another way people try to get through a period of unemployment is by using their savings. Some households have savings for emergencies, and it can come in handy to cover bills if your household income has decreased. However, once you spend your savings, it can be challenging to build your savings account back up. Until you do, an unexpected car repair, household repair, or another costly event can then be problematic if you do not have saving s to cover it. This can lead you to use credit cards, which can be difficult to pay off, as discussed. 

Consult with a Merrillville, Indiana Bankruptcy Attorney Today

Unemployment – even temporarily – can cause financial issues for your household. If you are over your head in debt and are behind on payments, speak with Whitten & Whitten about your options. Contact us for more information about bankruptcy today.