Bankruptcies Up 34 Percent; Lawyers Observe Health Care Cost Impact
The number of federal bankruptcy cases is up more than 34 percent for the 12 months ending Sept. 30—the end of the federal judiciary’s fiscal year—than it was for the prior 12 months, according to statistics released today.
Business filings are up 52 percent over 2008 (58,271 from 38,651) while nonbusiness filings are 34 percent higher (1,344,095 from 1,004,342), according to an Administrative Office of the U.S. Courts news release.
Meanwhile, the New York Times reported today about a “general sense among bankruptcy lawyers and court officials … that the share of personal bankruptcies caused by illness is growing.”
Susan R. Limor, a bankruptcy trustee in Nashville, Tenn., told the Times that she calculated that 13 of the 48 Chapter 7 liquidation cases on her docket on a recent afternoon included medical debts of more than $1,000.
Other lawyers at the same Nashville court estimated medical debt was a decisive factor in 15 to 50 percent of bankruptcies—and felt that number might in fact be higher because credit card debt is often medical debt in disguise, the Times said.
