Published on:

How Coronavirus Might Affect Your Finances, and What You Can Do About It

Every January 1st, people make resolutions about changes they want to see in the new year; things like hitting the gym, saving money, finishing college or just vowing to be a better person make many lists.  At the beginning of this new decade, no one had any idea that within weeks, something that we cannot even see would change the world—and change it drastically. Just 3 months into 2020, COVID-19, or the Coronavirus,   has already infected over one million people and killed over 50,000, according to Johns Hopkins University.

Americans are now bracing for the worst week since COVID-19 came on the scene. President Trump warned that the upcoming two-week period will be “painful.” However, Dr. Fauci, a key member of President Donald Trump’s Coronavirus Task Force, added: “We should hope that within a week, maybe a little bit more, we’ll start to see a flattening out of the curve and coming down.”

People who still have jobs are worried about how long the virus will stick around and keep businesses shuttered. Tourism is dead in the Sunshine state and the governor finally issued a stay-at-home order. When people are at home, they do not support the local economy.  This lessened demand for products and services has a ripple effect, which impacts all sectors of the economy. People are not only learning how interdependent the economy is, but also that some jobs are more “essential” than others.

CNN says that more than half of American jobs are at risk because of coronavirus. It is estimated that nearly 20 million U.S. workers could be laid off or furloughed by July.

Millions of Americans have already lost jobs or have had their pay reduced because of closed stores and stay-at-home orders. Macy’s, Kohl’s, Gap to furlough majority of their workers–meaning 125,000 people are no longer working and have to file for unemployment.   Many Americans are having sleepless nights, wondering how they will pay their monthly bills

Congress passed the Coronavirus Aid, Relief, and Economic Security  (CARES) Act to tide Americans over during the pandemic. In addition to giving most Americans $1,200 each as part of advance against a future tax refund, enhanced unemployment benefits for workers laid off or furloughed during the crisis. This added benefit gives unemployed workers $600 per week that is in addition to their normal weekly benefit under state unemployment programs. The added benefit ends July 31, 2020. And while states have traditionally managed unemployment benefits programs, the new $600 per week program is being handled, and paid,  by the federal government. So, the additional payments may not come to workers as fast as their state benefits. State offices might not be able to tell you when you will start receiving the additional federal payments.

In addition, independent contractors (like Uber drivers) and freelancers (those who get 1099s and not W2s) qualify for the federal benefit of $600 per week. This is a major change in unemployment benefits. Some critics see this change as a “bailout” of big tech companies, since the employers will not be paying this part of the unemployment benefits.

Workers who were laid-off or furloughed can apply for unemployment benefits online at their official state websites. Many such sites have been inundated with applications, so it might be best to apply at odd hours when not as many people will be online. Many states are hiring additional staff to keep these sites from crashing.  Florida, which has some of the lowest state benefits in the nation, has hired more tech workers to deal with the influx of online applications.

Some employers are worried that the higher supplemental federal benefits will lead to people leaving their low-paying jobs in order to get better pay from the new federal program. One employer in Arkansas said:

“At the end of the day, I hope we can get us through July 31, which is when this unemployment bonus expires,” he said. “I cannot understand how the people who made this decision [to supplement unemployment benefits] didn’t realize that paying more for unemployment could be a major driver of the unemployment rate.”

Some 200 workers at Anthony Timberlands’ pine mills in Malvern and Bearden will be laid off temporarily, in part because they prefer to receive unemployment checks that will be larger than their take-home pay, Steve Anthony, the company’s chief executive officer, said Friday.

However, with these enhanced unemployment benefits ending on July 31, 2020, this type of thing will most likely not become a trend.

Other ways that people plan to cope with reduced hours or pay is to incur more debt. A recent study sought to found out how much money people in each state thought they would have to borrow in order to stay afloat in the wake of the layoffs and furloughs caused by Coronavirus. The study looked how people in each state are anticipated to use debt to stay afloat during the crisis.

According to Bankruptcy judge Cat McEwen in Tampa, Florida, tweeted the author saying an economist for the Bankruptcy Court anticipates that new case filings will take off in six months.

If you need help dealing with a job loss, loss of income, or overwhelming debt, contact the Law Office of David M. Goldman, PLLC today for a free initial consultation. Our office has experienced  lawyers who have been helping debtors discharge their debts and protect their assets for years.  A Jacksonville Bankruptcy Lawyer can help you decide if filing bankruptcy is best for your future.



Contact Information