Medical Expenses, Bankruptcy, and Stress – Part 1

by Johnny Tisdale on December 3, 2012

Poor health and bankruptcy are often intertwined in a two-way causal relationship: Poor health leads to bankruptcy and bankruptcy leads to poor health.

Elizabeth Warren, who was just elected to the U.S. Senate, also happens to be an expert on American bankruptcy law. In a 2005 study conducted with Harvard colleague David Himmelstein, she found that over half of all personal bankruptcies are filed in the wake of a medical problem. In another study two years later, the same researchers found that the number of medical bankruptcies had increased to over 60%.

We’ve seen how poor health – in the form of medical expenses – leads to bankruptcy. Now, how does bankruptcy feed back in to the loop, creating even more poor health?

The answer is stress. When people become so overwhelmed by debt that they begin to consider filing for bankruptcy, they understandably begin to suffer from stress. California bankruptcy attorney Cathy Moran posits that two of the main causes of this stress are fear of the unknown and “self-inflicted moral judgments.” These two factors are closely related.

Fear of the unknown is virtually universal among human beings. It causes us to react aggressively toward unfamiliar ideas and people whom we see as being different from us. Considering that fear of the unknown has been at the root of many of the most tragic atrocities in history, it is not surprising that it can also lead to a little stress in the individual filing for bankruptcy.

The average American knows very little about bankruptcy. All we know is the stigma associated with it. And that’s where those pesky self-inflicted moral judgments come in.

For those of us who grew up in a capitalistic society, it’s easy to slip into the subconscious belief that a person’s worth is determined by how much money they have. In fact, this belief is only “subconscious” for those who would rather not think of themselves as being so superficial and materialistic. For others, such as social Darwinists, it’s an explicit guiding principle of the free market. They believe in survival of the fittest. Allow people to compete; those who are fit will prosper financially while those who are unfit will starve to death.

This equation of self-worth and financial worth is one reason that we struggle to “keep up with the Joneses.” If our next door neighbor buys a brand new shiny sports car, it makes our car look old and rusty by comparison. It makes it appear as if the Joneses have more money than us. By extension – according to our subconscious capitalistic belief – it makes it seem as if the Joneses are simply better people than us. In order to alleviate the resulting inner feeling of inferiority and to save face, we have no option but to buy an even newer, shinier car.

The belief that your worth is the amount in your bank account can result in stifling self-criticism when you find yourself so indebted that you begin to consider filing for bankruptcy. As mentioned, there is quite a stigma associated with the bankruptcy process in general. It makes you judge yourself harshly. You think that you don’t have enough money to enjoy the luxuries of the American lifestyle. You feel like a complete financial failure. You feel like you’re just not good enough.

Later this week I will reveal that the solution to debt-related stress is simpler – yet profounder – than you might think. In the meantime, if you simply can't wait any longer, go ahead and call me at 510-233-7700. You'll feel better by the time your free face-to-face consultation is over, knowing that you're taking the steps necessary to get this all behind you.

Click here to read Part 2.

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Johnny Tisdale

Paralegal at Dowe Law Firm
Johnny Tisdale is a paralegal, web designer, and writer at the Dowe Law Firm. He earned his BS in psychology and ABA-approved paralegal certificate from Auburn University Montgomery in 2011.

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