The emergency extension granted to long-term unemployed individuals could end if the Congress does not vote to extend it. This could have disastrous effects on the economy and contribute to an increase in the number of bankruptcy filings in Texas.
In July 2008, Congress began extending unemployment benefits, which can now last for up to a record 99 weeks: 26 weeks of regular benefits from the states, plus up to 73 weeks in federal aid in states with high unemployment rates. As of last week, about half the states offered the maximum 99 weeks of benefits. The maximum available time for benefits in Texas was slightly less, 93 weeks.
If Congress does not act, workers who are unemployed in Texas and other parts of the country could see their unemployment benefits end after six months. But many in Congress worry that the continued extension of the unemployment benefits could add a tremendous amount of money to the national deficit. However, it’s a catch-22. While unemployment benefits could add to the deficit, failing to keep the extension when the average time of unemployment has extended far beyond six months to one and two years, could create new crises, such as an increase in homelessness and poverty amongst women and children.
But whatever Congress decides, unemployed workers need to begin taking an honest look at their financial picture. Attempting to pay debts and expenses over the long-term with unemployment payments is not a wise decision. It may be wiser to consider discharging some of those debts in bankruptcy so that more of your unemployment benefits can go to what’s important while looking for full-time work.