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Medical costs and bankruptcy II



Todd Zywicki has an even more systematic refutation of the oft-cited statistic from a Harvard study that half of bankruptcies are caused by illness or medical bills in his continuing series on bankruptcy reform. Dr. Rangel is also on the case. Earlier entry: Feb. 14.

Zywicki also persuasively demonstrates that credit cards have not worsened household financial conditions; rather credit cards are substituting for more expensive and less-attractive forms of debt and credit such as pawn shops and retail store credit. Too, Zywicki notes, people going into bankruptcy have an incentive to use the dischargeable debts of credit cards to pay non-dischargeable or secured debts.

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.