According to an article in the Dallas Morning News, Texas is quickly burning through cash in the unemployment insurance trust fund. Just last week Texas paid out $64 million in unemployment benefits, which is more than twice the amount it paid out in the same week last year

The article said:

Larry Temple, the commission’s executive director, testified that the trust fund is expected to have just $48 million on Oct. 1, when it is required by law to have $860 million.

“We’re going to have some tax increases,” he said.

At this blog we have wondered aloud about the ramifications of high numbers of people on unemployment insurance . Well here it is–too little money for too many unemployed Texans equals a depleted unemployment trust fund. The unemployment insurance benefits program was not designed to handle the massive amounts of unemployed people we have now and are going to have in the near future.

Has it reached its tipping point yet? Maybe. But whether the unemployment insurance program reaches its “tipping” point now or later, workers who have experienced job losses need to consider their options for reducing or discharging debt in bankruptcy. The reason so many people are on the unemployment benefits program is that they simply cannot find new jobs.

What this means is that many workers are trying to repay debts and basic living expenses using minuscule unemployment benefits checks. This is not a plan for financial security. Creditors are experiencing a record number of defaults and many are pulling out ever strategy in the book to force debtors to repay even if they are unemployed.

And they are often sending delinquent accounts to collections quicker and acting more aggressively to collect their debts. There was even an article in the NYTimes about creditors targeting the relatives of dead people to convince them to pay off the debts of the deceased. Now that’s desperate.

A young kid with no debts can live off of unemployment benefits; he/she doesn’t need bankruptcy. But workers with families, a mortgage, car note, student loans , credit card bills , utility bills and child care expenses should probably consider bankruptcy if they are facing long-term unemployment.