Signature Montana Magazine Spring 2021

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TEXT BY RANDY TARUM BACK TO BUSINESS SiG MT 37 SiG MT 23 rior to the Covid-19 pandemic, America enjoyed a 3.5% unemployment rate which was a 50-year low. According to the Bureau of Labor Statistics, 20.6 million people lost their jobs while unemployment rose to 14.7% due to pandemic shutdowns in early 2020. Job loss can be emotionally devastating and is the second leading cause to filing bankruptcy. Montana averaged over a thousand-chapter 7 bankruptcy filings per year in the four years up through 2019. Despite significant job losses in 2020, Chapter 7 bankruptcy filings were down nearly 30% from 2019, a remarkable trend that repeated across the country. e reduction in bankruptcy filings has been aributed to significant unemployment benefits paid by the federal government. Many Americans received more money from unemployment than they earned at their job, due to additional federal cash payments. Managing Director of the International Monetary Fund, Kristalina Georgieva, believes the United States could face a "dangerous wave" of bankruptcies if the government discontinues the fiscal support before the pandemic ends. Additional government funding has worked its way through congress, however, at some point, the fiscal support from the government will end and Americans will have to get back to work to avoid financial disaster. e unemployment rate in Montana peaked at 11.9% in April 2020 and fell to 4.4% in December of 2020, a significant trend in a good direction. Employment experts have expressed concerns about government actions that cause job losses in Montana and may prevent our state from geing back to, or improving on, our 3.5% pre-pandemic unemployment rate. According to Montana Aorney General, Austin Knudsen, cancelling the Keystone XL Pipeline will cause a significant negative impact on five high poverty counties in Montana by eliminating jobs and increasing energy bills for those least able to pay. One estimate measures the loss of the Keystone project at 11,000 jobs and $1.6 billion in wages throughout the affected states. Other actions by government have experts concerned that even as the pandemic resolves, unemployment rates will increase rather than improve. According to the Congressional Budget Office, if the proposed $15 an hour minimum wage hike would have passed, it would have cost 1.4 million jobs and adversely affected unemployment and family outcomes. e impact on low wage states like Montana could have been disproportionally severe. e cancellation of projects like the Keystone XL pipeline will likely increase bankruptcy filings for higher income earners who typically face home foreclosures and auto repossessions. Many of these filers will lose their homes and vehicles because of the scarcity of similar high-income jobs in Montana. ere will likely be a rippling of economic difficulties in the communities and small business that support the pipeline and related industries. Hopefully, our elected officials will take steps to reduce the negative impact on Montana families. For those who find themselves out of work and unable to make mortgage and car payments, a chapter 7 bankruptcy can provide a discharge of their debts and the ability to start over. Others who find new employment might be able to keep their home and cars by restructuring their debts through a chapter 13 bankruptcy. For more information or questions regarding bankruptcy, contact Tarum Law Office at 406-268-0001. THE CALM BEFORE A BANKRUPTCY STORM P S MT

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