Individuals with Two-Year Gap in Medical Coverage Nearly Twice as Likely to File for Bankruptcy, According to Research Included in Summer ABI Law Review
Alexandria, Va. — Individuals who experienced a gap in medical care coverage over a two-year period were roughly twice as likely to file for bankruptcy as those who retained continuous coverage, according to an article in the Summer 2019 edition of the American Bankruptcy Institute (ABI) Law Review (Volume 27, No. 2). In their article “Moving Beyond Medical Debt,” Prof. Brook E. Gotberg of the University of Missouri School of Law (Columbia, Mo.) and Prof. Michael D. Sousa of the University of Denver Sturm College of Law (Denver, Colo.) detail their research looking at data from a national survey of adults from 2004 through 2014 that indicates that the principal predictor of consumer bankruptcy is a lapse in medical insurance coverage.
Gotberg and Sousa's study was funded in 2016 by ABI's Anthony H.N. Schnelling Endowment Fund to examine whether the expansion of Medicaid through the Affordable Care Act (ACA) has had a correlative effect on the rate of consumer bankruptcy filings across the country. “Most existing empirical studies attempt to quantify the percentage of consumer bankruptcies that are ‘caused’ by unmanageable medical indebtedness,” Gotberg and Sousa write. “This article addresses what we believe to be a more significant line of empirical inquiry, namely, the connection between health insurance coverage and consumer bankruptcy as a more precise measurement of how national health insurance programs may or may not affect bankruptcy filing rates.”
“These findings contribute to the ongoing debate regarding the Affordable Care Act and the provision of health insurance to low-income Americans, and the role consistent health insurance coverage plays in relation to the consumer bankruptcy system.”
Other articles included in the Summer 2019 ABI Law Review include:
- “Credit Card Debt and Consumer Bankruptcy: Can We ‘Nudge’ Our Way Out?” by Prof. Robert J. Landry III of Jacksonville State University's School of Business and Industry (Jacksonville, Ala.).
- “‘The Supreme Court’s Jevic Decision Regarding Structured Dismissals in Bankruptcy Is Wrong. What's a Lawyer to Do?” by Prof. Jeffrey Davis of the University of Florida Levin College of Law (Gainesville, Fla.).
- “Escape from Pandemonium: Reconciling § 363(F) and § 365(H) in Qualitech’s Shadow and Spanish Peaks’ Wake” by Amir Shachmurove of Troutman Sanders (Washington, D.C.).
ABI’s Law Review, published in conjunction with St. Johns University School of Law in Jamaica, N.Y., is among the most cited and respected scholarly publications in the bankruptcy community. Now in its 27th year, it has the largest circulation of any bankruptcy law review. Past issues of the Law Review have focused on a variety of timely insolvency issues, including chapter 11 reform, distressed sectors, single-asset cases, consumer bankruptcy, revised Article 9 of the Uniform Commercial Code and other topics.
Members of the press looking to obtain any of the articles from the Summer 2019 issue should contact John Hartgen at 703-894-5935 or [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 nearly 11,000 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.abi.org/calendar-of-events.
Bill Raising Debt Ceiling for Family Farm Bankruptcies Heads to White House
Analysis: Families Go Deep in Debt to Stay in the Middle Class
Education Dept. Scores Victory in Long-Standing Battle with Private Debt Collectors
Senate Passes Four Bipartisan, Bicameral Bankruptcy Bills
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Bill Would Let Cash-Strapped Injured Veterans Keep Disability Money During Bankruptcy
U.S. Appeals Court Won’t Make Student Loans Easier to Discharge
Fifth Circuit Makes Student Loans Even More Difficult to Discharge
Senate Passes Small Business Reorganization Act, HAVEN Act and Family Farmer Reorganization Act
Alexandria, Va. — The U.S. Senate today passed the Small Business Reorganization Act of 2019 (H.R. 3311), HAVEN Act (H.R. 2938) and Family Farmer Relief Act of 2019 (H.R. 2336) by a voice vote. ABI testified in support of the three bills. The legislation will now proceed to President Trump for signature into law.
“The three bills modernize the Bankruptcy Code to ensure that struggling veterans, Main Street businesses and family farmers have access to better tools for achieving a financial fresh start,” said ABI Executive Director Samuel J. Gerdano. “ABI commends the Senate action.”
H.R. 3311, the “Small Business Reorganization Act of 2019” (SBRA)
The SBRA would add a new subchapter V to chapter 11 providing a better path for small businesses to successfully restructure, reduce liquidations, save jobs and increase recoveries to creditors. It adopts the current definition of a “small business debtor” as a person in commercial or business activity with an aggregate or noncontingent liquidated secured and unsecured debts as of its bankruptcy filing date of not more than $2,725,625. Introduced by Reps. Ben Cline (R-Va.), David Cicilline (D-R.I.), Doug Collins (R-Ga.) and Steve Cohen (D-Tenn.), the SBRA is inspired by the work of the National Bankruptcy Conference and ABI’s Commission to Study the Reform of Chapter 11. A bipartisan companion bill (S. 1091) was sponsored in the Senate by Sen. Charles Grassley (R-Iowa).
“With proper planning and execution, that Small Business Reorganization Act enables financially troubled small businesses to emerge from bankruptcy within months following a court-approved plan of reorganization,” Gerdano said.
H.R. 2938, the “Honoring American Veterans in Extreme Need Act of 2019” (HAVEN Act)
The HAVEN Act was introduced in the House by Reps. Lucy McBath (D-Ga.) and Greg Steube (R-Fla.) to exclude VA and DoD disability payments from the monthly income calculation used for bankruptcy means testing. The bill was included in the National Defense Authorization Act, which passed on June 27. ABI Veterans Affairs Task Force Member Holly Petraeus, a former assistant director of the Consumer Financial Protection Bureau, testified in favor of the bill on behalf of the Task Force before the House Judiciary Committee. A bipartisan companion bill (S. 679) was introduced in the Senate by Sen. Tammy Baldwin (D-Wis.).
“VA and DoD disability payments made to veterans or their dependent survivors were earned in defense of our country,” Gerdano said. “The HAVEN Act corrects the Code to make sure that these payments are shielded from creditors.”
H.R. 2336, the “Family Farmer Relief Act of 2019”
The Family Farmer Relief Act of 2019 (H.R. 2336) was introduced in the House by Rep. Antonio Delgado (D-N.Y.) to update chapter 12 of the U.S. Bankruptcy Code to reflect the economic challenges facing distressed farmers. Chapter 12 was added to the Bankruptcy Code 1986 to provide reorganization relief to family farmers and fishermen to more properly handle this specialized area of bankruptcy law. Farm size has increased substantially since 1986; meanwhile, net farm income has declined since 2013. As the current debt limit for chapter 12 filings is $4.3 million, H.R. 2336 would raise this limit to $10 million. A bipartisan companion bill (S. 897) was sponsored in the Senate by Sen. Charles Grassley (R-Iowa).
"The Family Farmer Relief Act reinforces chapter 12 to provide family farmers with a durable tool to deal with the cyclical economic challenges faced in American agriculture, roiled by fluctuating land values, swings in commodity prices, weather calamities and adverse trade policies made by government," Gerdano said.
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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 nearly 11,000 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.abi.org/calendar-of-events.