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A few short months ago, the idea of an unstoppable global pandemic taking millions of lives was something reserved for action movies and sci-fi films. Today, however, it’s a horrifying reality. As COVID-19 continues to spread around the world, its physical, emotional, and practical effects are being felt by billions of people.
But coronavirus isn’t just taking the lives or health of millions of people; it’s taking their wealth too. As industries grind to a halt and economies nosedive, the financial implications of COVID-19 are undoubtedly far-reaching. In fact, it could take generations before economies bounce back, So, what has coronavirus really taught us about finances?
Analysts routinely report that most people are just one or two paychecks away from being homeless. For the majority of people, this is an uncomfortable fact that we don’t spend too long thinking about. Taking our incomes for granted, we prefer to assume that, as long as we can keep earning, we can retain our possessions, our homes, and our lifestyles.
Since the pandemic arose, however, it’s become all too clear just how many people are living close to the edge. Trading suspensions designed to prevent the spread of the virus left many people unable to work and, therefore, unable to earn. As a result, a significant number of households have been left with a fraction of their income or no income at all.
While emergency measures have given some people respite from the aggressive collections action they would usually face, it is only a matter of time until financial institutions begin demanding payments in full.
As most families have relatively little capital to rely on, a financial crisis appears to be looming. If individuals are unable to replace their lost income and don’t have the capital to cover their essential expenditure, there is likely to be a significant growth in the homeless population throughout the U.S. and across the world.
When people are unable to fund their lifestyles, it’s easy to get into debt. With many people struggling financially due to COVID-19, a national debt crisis may be on the way too. Indeed, the number of people looking for ways to discharge their debts or file for insolvency has been increasing in recent years, even before coronavirus took hold.
As more people are likely to experience financial difficulties in upcoming months, increased demand for bankruptcies, consumer proposals, and debt discharges is expected. With financial pressure mounting, people are even likely to seek help from unconventional sources. Arguing that a New World Order means slavery or that debt is an illusion, people may seek to find a reason to explain their unforeseen financial issues. For people who have spent years budgeting and monitoring their finances, the economic impact of a novel virus might push them towards novel financial concepts.
There’s no doubt that there will be financial casualties on the horizon. Companies will be forced to close; industries will experience losses and families will experience tough times. As a result, the financial safeguards designed to support businesses and individuals will be tested. We can only hope that the regulations designed to protect us and the determination of the hardworking American men and women will facilitate a speedy economic recovery and restore financial freedom to those who need it most.
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