Americans filed for bankruptcy at a rate of 6,020 per day in May, reports Credit Slip's Bob Lawless. That's the first time the 6,000-per-day mark has been broken since the passing of the 2005 bankruptcy law, which made it hard for Americans to seek relief from their debts.
In related bankruptcy news, the results of a study to be published in the August issue of the American Journal of Medicine show that "medical problems contributed to nearly two-thirds (62.1 percent) of all bankruptcies in 2007." More strikingly -- "between 2001 and 2007, the proportion of all bankruptcies attributable to medical problems rose by 49.6 percent." (Found via Mark Thoma.
The authors of the study cite their findings as yet more evidence that the healthcare system in the United States is broken.
Dr. Deborah Thorne, associate professor of sociology at Ohio University and study co-author, stated: "American families are confronting a panoply of social forces that make it terribly difficult to maintain financial stability -- job losses and wages that have not kept pace with the cost of living, exploitation from the various lending industries, and, probably most consequential and disgraceful, a health care system that is so dysfunctional that even the most mundane illness or injury can result in bankruptcy. Families who file medical bankruptcies are overwhelmingly hard-working, middle-class families who have played by the rules of our economic system, and they deserve nothing less than affordable health care."
We don't know what factors directly accounted for 2009's swelling bankruptcies -- obviously, you don't need the impetus of a serious medical problem to push you into bankruptcy when you've lost your job and your home because of a cratering economy. But it's also safe to assume that a significant number of people who might have been able to afford their healthcare no longer can, given the current economic circumstances. So I think Thoma is right to wonder "how much a health care plan that protects people from losing everything when serious illness hits would have helped to soften the economic crisis."