According to an article in the Star-Telegram, the national unemployment rate spiked to 9.4 percent in May.  It’s the highest unemployment rate in more than 25 years despite a slight decrease in job loses with employers cutting 345,000 jobs in May.

The article said:

Still, the increase in the nation’s unemployment rate from 8.9 percent in April underscores the difficulties that America’s 14.5 million unemployed are having in finding new jobs. Economists had expected the rate to hit 9.2 percent last month. If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.4 percent in May, the highest on records dating to 1994.

Many employers are reluctant to hire as sales drop and bankruptcy looms for many. Job losses and hiring freezes are usually the first line of defense for businesses attempting to stay afloat and avoid bankruptcy.  But with 14.5 million Americans still unemployed and millions more struggling with part-time and/or reduced wages, consumption has fallen significantly, putting the squeeze on businesses accustomed to the unbridled growth of the last decade.

Despite a slow down in job losses, analysts expect unemployment to continue to rise as high as 10.2 percent by next year. Workers who are facing job losses should have realistic expectations about the current job market.  Many unemployed workers are facing as much as a year or more of unemployment and are often forced to take positions that pay significantly less than what they were making previously. Oftentimes, the new salary is not enough to cover all of their bills causing many to fall behind and/or raid savings/retirement.

If you’re a working facing extended unemployment, consider all of your options.  The law allows debtors to discharge debt using bankruptcy if they are unable to pay their debts.  Being unemployed for an extended period of time may be a good reason to file bankruptcy.  Depleting your savings and retirement account to repay debt may have long-term negative financial consequences, especially if you are currently unemployed.  Please speak with a Dallas-Fort Worth bankruptcy attorney before liquidating your assets to repay debt. Bankruptcy may help you discharge your debt and protect your financial future.