The Right Coast

February 05, 2005
Medical Bills as a Cause of Bankruptcy (Part II)
By Gail Heriot

Art Webster, a Maryland attorney whose general practice includes a great deal of bankruptcy, wrote to comment on my previous post:

"I saw the article you refer to the New York Times this morning and I was also surprised by it. Frankly, I found it hard to believe from my practice. The vast majority of my clients’ financial problems are caused by divorce and loss of job. I would be surprised if 5% of my bankruptcies are caused directly by medical bills. Now, medical PROBLEMS cause a lot of bankruptcies. But by that I mean people who become disabled or lose their jobs due to medical and/or health reasons. One couple [that I've represented] filed because the husband was a state employee and due to a series of heart attacks went from a job earning $75K to one earning $40K. But all of his medical bills were paid. He just could no longer service his credit card and personal loan debt. Sad story, but nothing to do with medical bills."

Art files about 150 Chapter 7 petitions a year on behalf of his clients, so he's looking at a pretty large sample.