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Many Bankruptcies Are Caused by Medical Bills According to Harvard Study

High medical debt hits Long Island middle class families hard, and bankruptcy has provided reliefWritten by Craig D. Robins, Esq.
 
High medical debt hits Long Island middle class families hard, and bankruptcy has provided relief
 
In a study released today, Harvard professor Elizabeth Warren, whose work I’ve cited extensively, concluded that medical problems contributed to almost two-thirds of all bankruptcy cases filed in 2007.
 
She also found that between 2001 and 2007, the proportion of all bankruptcy cases attributable to medical problems rose by 50 percent. President Obama has widely cited Ms. Warren’s previous findings.
 
The study indicated that many solid middle class families were hard-hit by the high cost of serious medical illness, resulting in financial disaster.
 
One of the study’s co-authors, which included several prominent doctors, commented that:
 
“Our findings are frightening. Unless you’re Warren Buffett, your family is just one serious illness away from bankruptcy. For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments and deductibles that illness can put you in the poorhouse. And even the best job-based health insurance often vanishes when prolonged illness causes job loss – precisely when families need it most. Private health insurance is a defective product, akin to an umbrella that melts in the rain.”
 
These are very sobering words which explain why so many middle class families are seeking bankruptcy relief in New York and on Long Island.  When one considers the high expense of health care on Long Island, it is understandable that Long Island families are confronting a panoply of social forces that make it terribly difficult to maintain financial stability.
 
Most of my clients are typical middle class Long Island families.  I wrote about this phenomenon several years ago in an article, Consumer Bankruptcy: Bankruptcy has Become a Middle Class Phenomenon [1].
 
Also, for more info on how bankruptcy can eliminate medical debt, see my earlier post:  How to Eliminate Medical Bills [2].
 
A copy of the Harvard study is available at http://pnhp.org/new_bankruptcy_study/Bankruptcy-2009.pdf [3].
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