Many people relying upon unemployment benefits often find that the majority of their check is spent on making minimum payments towards existing debt, such as credit card bills.
Ft. Lauderdale, FL (Vocus) June 29, 2010
On June 24th the U.S. Senate failed for the third time to act on extending unemployment benefits, which are currently set to expire in November. Although more than 1.2 million Americans will exhaust their unemployment benefits by the end of June, senators are struggling to reach a compromise. A New Horizon Credit Counseling, a nonprofit credit counseling organization, noted that those who are unemployed and in debt face an even tougher challenge with the loss of this important resource.
According to Stephen Marcus, president of A New Horizon, “Many people relying upon unemployment benefits often find that the majority of their check is spent on making minimum payments towards existing debt, such as credit card bills.” When unemployment benefits end, said Marcus, people find that they quickly become delinquent on their bills. With the unemployment rate hovering just below 10 percent, the number of Americans facing potential financial peril is staggering.
Many experts predict that the bankruptcy rate will continue to climb as jobless Americans become unable to meet their debt obligations. According to Marcus, “A New Horizon has already experienced an influx of clients who turn to their debt management services, which help consumers avoid delinquency or bankruptcy.” While A New Horizon can help its clients reduce their debt, those consumers facing bankruptcy are not alone; the number of bankruptcy filings virtually doubled between 2006 and 2009, totaling nearly 1.4 million.
Senate Democrats calling for an extension of benefits have faced tough opposition from Republicans, citing the rising national debt. Senator Olympia Snowe of Maine may be the first link to a bipartisan agreement. Snowe has asked the democrats to propose a standalone bill, rather than the previous package deals they have offered. As the end of June approaches, however, many unemployed Americans with debt will likely face a tough road.
A New Horizon Credit Counseling Services is a nonprofit credit counseling organization that has been helping consumers with credit card debt since 1978. For more information about their programs, contact 1-800-556-1548. They can also be found on the web at http://www.anewhorizon.org, or reached via email at slieberman(at)anewhorizon(dot)org