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Cancer diagnosis increases likelihood of filing for bankruptcy

Over the years, multiple studies have demonstrated the link between medical bills and bankruptcy filings in the United States. Among the most widely cited studies are two reports co-authored by Elizabeth Warren of Harvard Law School. In her 2001 study, Warren found that at least 46 percent of all bankruptcies were caused by medical problems. By 2007, that number had risen to more than 62 percent of all bankruptcies.

While the relationship between medical debt and bankruptcy is probably not a surprise to most Tennessee readers, some critics have challenged the data. In an effort to respond to some of the critics, a new study published in June looked at a more specific group individuals who filed for bankruptcy between 1995 and 2009 to determine if cancer makes a person more likely to file for bankruptcy.

The study found, like Warren's previous two studies, that there does appear to be a significant relationship between medical problems and bankruptcy. In fact, not only was bankruptcy more prevalent among those with a cancer diagnosis, but the researcher found that on average individuals with a cancer diagnosis were around 2.5 times more likely to file for bankruptcy than individuals without a cancer diagnosis.

It is easy for hospital bills and medical expenses to quickly turn into unmanageable debt. Certain illnesses like cancer and other unexpected medical conditions can cost people thousands in out of pocket expenses, even when people are insured. To make matters worse, individuals diagnosed with such chronic illnesses are often unable to work. In such cases, seeking debt relief through bankruptcy may be the one of the best answers to the problem.

Source: Forbes, "Beware Of Cancer Metastasizing To Your Wallet," Peter Ubel, Aug. 16, 2013

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