Debt’s Grip: Risk and Consumer Bankruptcy provides a thick description of what it means to live in financial precarity in the United States. It draws on data from the Consumer Bankruptcy Project to tell people's stories of financial distress before and in bankruptcy. This piece responds to two reviews of Debt’s Grip published in the same issue of the American Bankruptcy Law Journal by Professors Alexandra Sickler and Ted Janger. This response summarizes important aspects of Debt's Grip and expands on insights in Professors Sickler’s and Janger’s reviews.

A rich literature uses law and social science methods to better understandhousehold financial distress and overindebtedness both inside and outside ofbankruptcy. This scholarship contributes to several ongoing scholarly con-versations, such as those on income and wealth disparities across race andclass, how people live in circumstances of financial precarity, why peopleturn to the legal system to solve their problems, and how to improve accessto justice so people can get the help they need. We first review the currentliterature about who files bankruptcy,the contributors to people's need to filebankruptcy, what happens to them in bankruptcy court, and what happensafter their bankruptcy cases conclude. We then outline a research agenda oflow-hanging fruit that will contribute to broader sociological and sociolegalresearch agendas, including economic mobility, aging, gender studies, healthstudies, family studies, social psychology, and policy work

A rich literature uses law and social science methods to better understand household financial distress and overindebtedness both inside and outside of bankruptcy. This scholarship contributes to several ongoing scholarly conversations, such as those on income and wealth disparities across race and class, how people live in circumstances of financial precarity, why people turn to the legal system to solve their problems, and how to improve access to justice so people can get the help they need. We first review the current literature about who files bankruptcy, the contributors to people's need to file bankruptcy, what happens to them in bankruptcy court, and what happens after their bankruptcy cases conclude. We then outline a research agenda of low-hanging fruit that will contribute to broader sociological and sociolegal research agendas, including economic mobility, aging, gender studies, health studies, family studies, social psychology, and policy work.

One in ten adult Americans have turned to the consumer bankruptcy system for help. For the past almost forty years, the only systematic data collection about the people who file bankruptcy comes from the Consumer Bankruptcy Project (CBP), for which we serve as co-principal investigators. In this Article, we use CBP data from 2013 to 2019 to describe who is using the bankruptcy system, providing the first comprehensive overview of bankruptcy filers in thirty years. We use principal component analysis to leverage these data to identify distinct groups of people who file bankruptcy. This technique allows us to situate the distinctions among filers’ financial and household situations within what bankruptcy laws and courts can and cannot provide. We critique the consumer bankruptcy system, based on the totality of people who have used it recently, to identify avenues for reforming bankruptcy and to underscore the broader economic, racial, and social issues that consumer bankruptcy filings highlight.

As neoliberal ideology and policies gained a foothold in the early 1980s, the social safety net for older Americans contracted. Responsibility for the risks associated with aging, namely retirement income and healthcare costs, was increasingly transferred from the state to the individual. Using data from the Consumer Bankruptcy Project, we report that since 1991, there has been more than a twofold increase in the rate at which older Americans (age 65 and over) file for consumer bankruptcy and an almost fivefold increase in the percentage of older persons in the U.S. bankruptcy system. This magnitude of growth is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. Respondents report that inadequate income and unmanageable healthcare costs are the chief reasons for their bankruptcies. Our findings suggest that neoliberal policies that offload healthcare costs and retirement savings onto older Americans may facilitate their bankruptcy filings.

Over the last ten years, 15.1 million people filed for bankruptcy owning 16.4 million cars. These cars provided access to work, education, medical care, childcare, food, and other life necessities. They also were major household investments, the most expensive asset most bankruptcy filers owned other than a house. Using original data from the Consumer Bankruptcy Project, we document what happens to car owners and their car loans when they enter bankruptcy. In brief, we find that people who file bankruptcy own automobiles at the same rate as the general population, and that they overwhelmingly indicate that they want to use bankruptcy as a tool to keep their automobiles. We further identify a subset of debtors, who constitute about a third of filers, who come to bankruptcy owning automobiles and little else. These cases are the most likely to be filed by people “driven to bankruptcy.” We detail what our results show about how people use consumer bankruptcy and where the system appears to falter. We conclude with recommendations on how to remedy these system issues, as well as what the future of the automobile marketplace, particularly subprime auto loans, likely means for people’s continued use of bankruptcy.

AffiliationsDavid U. Himmelstein and Steffie Woolhandler are with Hunter College, City University of New York, New York, NY, and Harvard Medical School, Boston, MA. Robert M. Lawless is with the University of Illinois College of Law, Champaign. Deborah Thorne is with the Department of Sociology & Anthropology, University of Idaho, Moscow. Pamela Foohey is with the Maurer School of Law, Indiana University, Bloomington.

The time before a person files bankruptcy is sometimes called the financial "sweatbox." Using original data from the Consumer Bankruptcy Project, we find that people are living longer in the sweatbox before filing bankruptcy than they have in the past. We also describe the depletion of wealth and well-being that defines people's time in the sweatbox. For those people who struggle for more than two years before filing bankruptcy-the "long strugglers"-their time in the sweatbox is particularly damaging. During their years in the sweatbox, long strugglers deal with persistent collection calls, go without healthcare, food, and utilities, lose homes and other property, and yet remain ashamed of needing to file. For these people in particular, though time in the sweatbox undermines their ability to realize bankruptcy's "fresh start," they do not file until long after the costs outweigh the benefits. This Article's findings challenge longstanding narratives about who files bankruptcy and why. These narratives underlie our laws, influence how judges rule in individual cases, and affect how attorneys interact with their clients.

This Article reports on a breakdown in access to justice in bankruptcy, a system from which one million Americans will seek help this year. A crucial decision for these consumers will be whether to file a chapter 7 or chapter 13 bankruptcy. Nearly every aspect of their bankruptcies — both the benefits and the burdens of debt relief — will be different in chapter 7 versus chapter 13. Almost all consumers will hire a bankruptcy attorney. Because they must pay their attorneys, many consumers will file chapter 13 to finance their access to the law, rather than because they prefer the law of chapter 13 over chapter 7. Attorneys charge about $1,200 to file a chapter 7 bankruptcy; their debt-laden clients must pay this amount upfront. Attorneys charge about $3,200 to file a chapter 13 bankruptcy, but clients can pay attorney fees over time as part of their cases. Chapter 7 and 13 bankruptcies also differ in the relief achieved. Almost all chapter 7 cases end with the debtor receiving a discharge of debts. In contrast, only around one-third of chapter 13 cases end in discharge. This Article exposes the increasingly prevalent phenomenon of debtors paying nothing in attorneys’ fees to file chapter 13. New data from the Consumer Bankruptcy Project, our original empirical national study, suggest that these “no money down” consumers are similar to those who use chapter 7. However, because they cannot afford to pay their attorneys up front, these “no money down” bankruptcy debtors suffer. They pay $2,000 more and have their cases dismissed at a rate 18 times higher than if they had filed chapter 7. The two most significant predictors of whether a consumer files a “no money down” bankruptcy are a person’s place of residence and a person’s race. We could not identify legitimate ways that these factors correlate with debtors’ needs for the substantive legal benefits of chapter 13. “No money down” bankruptcy can be a distortion in the delivery of legal help. We suggest reforms to how attorneys collect fees from consumer debtors that will reduce the potential conflict between clients’ interests and attorneys’ interests. The reforms will deliver access to justice and improve the functioning of the bankruptcy system.

BACKGROUND: Massachusetts' recent health reform has decreased the number of uninsured, but no study has examined medical bankruptcy rates before and after the reform was implemented.METHODS: In 2009, we surveyed 199 Massachusetts bankruptcy filers regarding medical antecedents of their financial collapse using the same questions as in a 2007 survey of 2314 debtors nationwide, including 44 in Massachusetts. We designated bankruptcies as "medical" based on debtors' stated reasons for filing, income loss due to illness, and the magnitude of their medical debts.RESULTS: In 2009, illness and medical bills contributed to 52.9% of Massachusetts bankruptcies, versus 59.3% of the bankruptcies in the state in 2007 (P = .44) and 62.1% nationally in 2007 (P < .02). Between 2007 and 2009, total bankruptcy filings in Massachusetts increased 51%, an increase that was somewhat less than the national norm. (The Massachusetts increase was lower than in 54 of the 93 other bankruptcy districts.) Overall, the total number of medical bankruptcies in Massachusetts increased by more than one third during that period. In 2009, 89% of debtors and all their dependents had health insurance at the time of filing, whereas one quarter of bankrupt families had experienced a recent lapse in coverage.CONCLUSION: Massachusetts' health reform has not decreased the number of medical bankruptcies, although the medical bankruptcy rate in the state was lower than the national rate both before and after the reform. (C) 2011 Elsevier Inc. All rights reserved. . The American Journal of Medicine (2011) 124, 224-228

This qualitative study examines the gendered division, and emotional effects, of household financial labor among severely indebted couples prior to filing consumer bankruptcy. Interviews with 19 newly bankrupt couples in Spokane, Washington, illustrate how, before bankruptcy, the peripheral and mundane chore of paying bills transforms into multiple arduous core chores: micro-management of money, debt collector negotiations, and researching and deciding to file bankruptcy. These newly emergent low-control chores are gendered and the wives' responsibility. Gendering occurs for two reasons. Some women retain responsibility for emergent chores because husbands exhibit financial irresponsibility. Others request their husbands' assistance, but the men refuse because the financial chores are upsetting or bothersome. Many wives who manage the newly emergent financial chores experience negative emotional effects.

Since the early 1990s, the age distribution of the bankruptcy population has shifted. Specifically, the age distribution curve has flattened, due in large part to an increase in the number of elder Americans (65 and older) who are filing bankruptcy. To date, the reasons for elder bankruptcies have not been studied. Quantitative and qualitative data from 381 elder bankruptcy respondents who participated in the 2007 Consumer Bankruptcy Project suggest that overwhelming interest and fees on credit cards, illnesses and injuries, income problems, aggressive debt collectors, and housing problems are the leading reasons that elder debtors file bankruptcy. Further, the vast majority of elder bankruptcies result not from a single cause, but rather from multiple interconnected causes.

Class will explore the consequences of the socio-historical shift from an industrial/production society to one that is grounded in consumption. Essentially, there has been a sea-change in our larger culture—our economy is not about producing stuff anymore (see Marx), instead it is about consuming it (see Baudrillard and Ritzer). As a result of this, I am, like you, barraged with messages, insisting that above all else, I must consume—whether that consumption is vehicles, food, sex, education, housing, clothing, entertainment, yada, yada, yada—I must, I am told, consume!

BACKGROUND:Our 2001 study in 5 states found that medical problems contributed to at least 46.2% of all bankruptcies. Since then, health costs and the numbers of un- and underinsured have increased, and bankruptcy laws have tightened.METHODS:We surveyed a random national sample of 2314 bankruptcy filers in 2007, abstracted their court records, and interviewed 1032 of them. We designated bankruptcies as "medical" based on debtors' stated reasons for filing, income loss due to illness, and the magnitude of their medical debts.RESULTS:Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; 92% of these medical debtors had medical debts over $5000, or 10% of pretax family income. The rest met criteria for medical bankruptcy because they had lost significant income due to illness or mortgaged a home to pay medical bills. Most medical debtors were well educated, owned homes, and had middle-class occupations. Three quarters had health insurance. Using identical definitions in 2001 and 2007, the share of bankruptcies attributable to medical problems rose by 49.6%. In logistic regression analysis controlling for demographic factors, the odds that a bankruptcy had a medical cause was 2.38-fold higher in 2007 than in 2001.CONCLUSIONS:Illness and medical bills contribute to a large and increasing share of US bankruptcies.

Debt has become the common denominator of American life. From young people taking on student loans to older Americans struggling to pay for health care costs and prescription medications, anxiety over debt is now a constant companion. This year, more than a million families declared themselves unable to deal with their debts by filing for bankruptcy. Because bankruptcy is a public manifestation of the most extreme financial trouble, it offers one view of the economic health of Americans across the age spectrum. This is the first report of data collected from the 2007 Consumer Bankruptcy Project (CBP). We have analyzed the age distribution of bankruptcy filers over the past sixteen years, and we present three crucial findings. Since 1991,