Medical Debt and Bankruptcy Relationship Questioned

 

Sen. Elizabeth Warren (D-Massachusetts) authored a paper on medical debt as a professor before her political career that continues to influence policymakers who are especially interested in expanding health coverage through public funding. The New York Times reports that that study is in question methodologically by other scholars. Dr. Warren wrote that paper as a professor along with two others. In it, they claimed that over 40% of bankruptcies in the United States were caused by medical bills. The initial research was published in 2005. In 2009, they updated it to claim that a staggering 62% of bankruptcies were caused by medical bills. The researchers counted a bankruptcy as having a medical cause if patients had at least $1,000 in medical debt, missed work for two weeks, or mortgaged a home to pay medical debts.
The study also relied on a survey of 1,800 people in 2001 who self-reported the nature of their bankruptcies. Two other scholars, David Dranove and Michael Millenson, arrived at a figure that was less than 20% in another study. Warren and her colleagues criticized the corporate funding of this study. Dr. Dranove in particular was surprised by this particular criticism, saying that he wanted a figure that reflected the true story of what was taking place.
Another group of researchers looked at all the bankruptcies in the state of California, analyzing their causes. They concluded that only 4% of bankruptcies were caused by medical debt. This study also came under fire for its funding sources. The true nature of this problem is likely at this point unknown, but bankruptcy stemming from medical debt occurs on a very regular basis with the clients we see in our daily practice.
Whether the true percentage of medical related bankruptcies is 4% or 62%, the attorneys at Bankruptcy Clinic, PC, are ready to help you. Anyone who may need bankruptcy relief due to medical debt should not overly personalize this. Many prospective lenders may be sympathetic to the circumstances surrounding a medical bankruptcy.
The bankruptcy laws are supposed to assist citizens. We at the Bankruptcy Clinic, PC, are committed to making sure that filing bankruptcy is as positive and helpful an experience as it can be. If you or someone you know needs bankruptcy protection in Southern Illinois, contact us right away.

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