$20,000 in credit card debt and a negative bank account: The cost of one woman’s wait for unemployment benefits during Covid-19

Jeanne Flynn, 34, has accumulated thousands in credit card debt while waiting for unemployment benefits to arrive in New Jersey.

Jeanne Flynn

Jeanne Flynn used to worry about money. But never like this.

Flynn, 34, lost her restaurant job in March as the coronavirus pandemic raged.

Months of waiting for unemployment benefits and little savings forced Flynn, who has two young children and is still out of work, to use credit cards to live.

Nine months later, the damage has been substantial: $20,000 in new debt, a negative bank-account balance and a plummeting credit score, records show.

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“Everything went onto a credit card,” said Flynn, who lives in Beachwood, New Jersey. “It’s a lot of small stuff that added up to a lot of big stuff.

“I can’t even look at [the balance],” she added. “It makes me sick.”

Flynn and her husband, from whom she’s separated, owe their landlord two months of rent. Flynn gave up her car and is subsisting on food stamps. Childcare duties make it tough to find another job, especially when she doesn’t have the money for a babysitter.

“I’m to the point where I don’t know what to do,” Flynn said.

System under stress

More than 6 million people filed for state unemployment insurance during two separate weeks in the early spring alone — six times the prior weekly record set in the early 1980s, according to the Federal Reserve Bank of St. Louis.

Extreme delays permeated the system. In January, about 93% of people were paid within three weeks of applying for benefits — the typical barometer for a timely payment. By September, that share had plummeted to about 60%, according to the U.S. Labor Department.

“This situation is very new,” said Sarah Hymowitz, chief attorney at Legal Services of New Jersey, who represents low-income clients in unemployment matters. “We’ve never had this level of intensity.”

States have largely recovered and are getting a handle on their backlogs, according to unemployment experts. But, with roughly 20 million people still collecting benefits nationwide, workers are still running into problems.

About 1 in 5 people paid in September had waited more than two months for that check to arrive, according to the Labor Department.

Months of waiting may spell disaster for those like Flynn who have few financial resources at their disposal.

“Without that cushion, when an emergency like a pandemic or job loss or wage loss strikes, the fall is immediate and precipitous and it can be impossible to recover from,” said Emily Benfer, a law professor at Wake Forest University and an eviction expert.

Those who lost employment income during the Covid-19 pandemic have been much more likely to use credit cards or loans, borrow from friends or family, and reallocate money from deferred bills to meet regular spending needs than those who didn’t lose their jobs, according to a recent U.S. Census Bureau survey.

Dead end

$14,000 of benefits

She’s been trying to access that pay since August, but the process has been painfully slow, she said. In total, Flynn would get more than $14,000 before tax if granted back pay to mid-March.

“Whenever we become aware of such claims — and, I’m pleased to report they are few and far between — we work diligently to make these claimants whole, and get them any and all benefits they are owed as quickly as possible,” Delli-Santi said.


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