Medical Bankruptcy Reform Will Likely Lead to Abuses According to New ABI Law Review Article
Medical Bankruptcy Reform Will Likely Lead to Abuses According to New ABI Law Review Article
Contact: John Hartgen
703-894-5935
[email protected]
“MEDICAL BANKRUPTCY” REFORM WILL LIKELY LEAD TO ABUSES, ACCORDING TO NEW ABI LAW REVIEW ARTICLE
May 18, 2011, Alexandria, Va. —
An analysis in the forthcoming Spring 2011 edition (Volume 19, No. 1) of
the ABI
Law Review finds that legislative proposals to create
preferential rules for individuals with medical debt will likely lead to
abuse of the relief afforded under the Bankruptcy Code. Authors Prof.
Amy Landry of the University of Alabama and Assistant
U.S. Bankruptcy Administrator Robert J. Landry III
(N.D. Ala.; Birmingham) wrote that recent legislative proposals
addressing “medical bankruptcy” are based on a premise that
most consumer bankruptcy cases are “medical bankruptcies.”
The “assertion that health care costs are the cause of consumer
bankruptcy has been repeated over and over again, to such an extent that
it is accepted as fact without any qualification or context placed on
the assertion,” according to the article.
The authors examined legislation introduced in the 111th session of
Congress, primarily the “Medical Bankruptcy Fairness Act of
2009.” “Assuming medical debts are the cause of the majority
of consumer bankruptcies, the reform does not address the root cause of
unpaid medical debt,” the Landrys wrote. “Even if medical
debt is not the root causal factor, but rather a factor among many
others, such as divorce and unemployment, of consumer bankruptcy
filings, medical bankruptcy reform does nothing to mitigate the
incidence of consumer filings.”
The authors urge policymakers to confront other policy domains that are
connected to bankruptcy and that play a significant role in debating a
reform of the health care finance system. “Regardless of the
disagreement on to what extent health care costs actually cause
bankruptcy, if we step back from the rhetoric and assume that half of
bankruptcies are caused by illness or medical bills, bankruptcy law is
not the problem,” the Landrys article concluded.
The ABI Law Review, published in conjunction with St. Johns University
School of Law is among the most-cited and respected scholarly
publications in the bankruptcy community. In addition to the article on
medical bankruptcy reform and two student notes, the Spring 2011 edition
of the ABI Law Review also includes the following feature articles:
'The Loss Mitigation Program Procedures for the United States Bankruptcy
Court for the Southern District of New York' written by Bankruptcy Judge
Cecelia G. Morris (S.D.N.Y.) and Mary K.
Guccion, Law Clerk to Judge Morris.
'Befuddlement Betwixt Two Fulcrums: Calibrating the Scales of Justice to
Ascertain Fraudulent Transfers in Leveraged Buyouts,' written by
Washington, D.C., bankruptcy attorneys John H.
Ginsberg, Daniel R. Czerwonka and M.
Katie Burgess, and Georgetown Law student and CPA
Zachary R. Caldwell.
'Bankruptcy Avant-Garde' written by bankruptcy attorney Jeremy
Murphy (Lincoln, Neb.) addresses a previous bankruptcy study
that found going-concern sales recover less than the value that could be
recovered through reorganizations. Murphy, however, hypothesizes that
the study was incorrect because firms sold as going-concerns enter
bankruptcy in worse condition than firms that reorganize.
To obtain a copy of the Spring 2011 edition of the ABI
Law Review, please contact John Hartgen at 703-894-5935 or via
email at [email protected].
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ABI is the largest multi-disciplinary, nonpartisan organization
dedicated to research and education on matters related to insolvency.
ABI was founded in 1982 to provide Congress and the public with unbiased
analysis of bankruptcy issues. The ABI membership includes more than
13,000 attorneys, accountants, bankers, judges, professors, lenders,
turnaround specialists and other bankruptcy professionals, providing a
forum for the exchange of ideas and information. For additional
information on ABI, visit www.abiworld.org. For additional
conference information, visit http://www.abiworld.org/conferences.html.