When companies in Kentucky and across the U.S. shut down operations, the effect on their employees can be catastrophic. Under certain circumstances, employees can lose their jobs, and some may never see their final paychecks.
A company may assume that unemployment insurance benefits will take care of its former workforce. Those benefits, however, are typically a fraction of what an individual previously earned, and the emergency income will only last for a limited time. Newly unemployed workers often find themselves left without a financial safety net and struggling to survive.
Finding themselves suddenly unable to meet a household budget, it may not be long before laid-off workers confront overwhelming circumstances. Considering a petition for a personal bankruptcy may then become a workable solution to get through the unexpected loss of income.
Laid-off employees’ final paychecks bounced, bills left unpaid for months
As reported by The Lexington Herald-Leader, after a mining company in Kentucky filed for bankruptcy protection, many of its former workers found themselves left without the wages owed them and with no severance pay. When it shut its gates, the company owed at least 1,000 employees millions of dollars in wages.
Some laid-off miners reportedly had their checking accounts frozen. After paying their bills with paychecks they fully expected to clear, they soon found their accounts overdrawn as a result of the company’s bounced checks.
After a months-long legal battle, the company agreed to pay more than $5M in back wages it owed to its miners. By this time, however, many of the laid-off workers accumulated crippling numbers of unpaid bills and became dependent on charity assistance to meet basic family needs.
Personal bankruptcy may offer a fresh start after a financial emergency
When faced with overdue bills and doubts about how to purchase necessities such as food, laid-off workers may find that a personal bankruptcy offers a viable path toward starting over. Individuals in need of financial relief may find many of the myths about consumer bankruptcy easily dispelled after taking a close look at the benefits.