Bankruptcy filings soared in 2008

By Darrell Smith
The Sacramento Bee
March 17, 2009

Bankruptcy filings in Sacramento and the Central Valley continue to soar as weary residents seek relief from the grip of foreclosures and rising unemployment.

More than 31,000 personal and business bankruptcy petitions were filed in the Eastern District of the U.S. Bankruptcy Court in 2008, an increase of 79 percent over 2007′s filings, according to a report released by the federal court.

The caseload is such that callers to the U.S. Bankruptcy Court in Sacramento are greeted with a message that says clerical staff are too busy to speak with them.

“We have never experienced increases with the number of percent we’re seeing,” said Richard Heltzel, clerk at the U.S. Bankruptcy Court for the Eastern District of California, based in Sacramento.

“With unemployment comes the loss of health insurance – so many of our bankruptcies are triggered by uninsured health care costs,” Heltzel said. “I expect to see close to 40,000 cases this year.”

http://www.sacbee.com/1089/story/1707863.html

Landmark studies have confirmed beyond any doubt that medical debt is a significant contributor to personal bankruptcy. Yet the opponents of comprehensive reform continue to challenge the data. In the report of John Goodman and his colleagues discussed in yesterday’s message, they stated, “Well-designed economic studies have found no statistical link between bankruptcies and health problems.”

Richard Heltzel, clerk at the U.S. Bankruptcy Court for the Eastern District of California, is not a health policy wonk. His only qualification is that he sees the health care costs listed in the personal bankruptcy filings.

Medical debt is a very real problem, faced by very real people, and it really does contribute to personal bankruptcy. Fortunately, most in Washington seem to understand that now, even if they disagree on what we are going to do about it. We can tell them how this problem can be eliminated, but they are still rejecting our advice, preferring instead to ensure the solvency of the private insurance industry.