Bankruptcy may be good for your health

08 Sep Bankruptcy may be good for your health

Bankruptcymay be good for your health since being over your head in debt produces enormous stress that threatens both physical and psychological health. Your body, not just your budget, may benefit from bankruptcy.

Americans resist filing bankruptcy: many live in a dream world where they hope that hard work or good fortune will allow them to pay off their debts over time. Too many consider plugging away at their debts a realistic alternative to getting a fresh start through bankruptcy.

Dr. Robert Sapolsky wrote about the effect of stress on health in the December 2005 issue of Scientific American. Chronic stress increases the incidence or severity of type 2 diabetes; gastrointestinal disorders; reproductive disorders; and immunity malfunctions. He also touched on the corrosive effect of “feeling poor” and without control, which seems to be an even better predictor of poor health than being objectively poor.

Most of my clients aren’t impoverished; they are caught in a financial situation where they see themselves as having little control over their situation and little social support for their predicament. Their financial plight dominates their life; they feel poor, powerless, and vulnerable. Often they imagine consequences of suffering a judgment or a levy as far more draconian than the law provides. They are, therefore, more at risk for a stress-sensitive disease.

That is why I often urge bankruptcy on those who objectively are judgment-proof. Someone is “judgment proof” if even a creditor with a judgment cannot take anything from them under the applicable laws. If being in debt causes stress even if there are no actual adverse consequences of that indebtedness, it impairs the worrier’s health.

Health issues may be the deciding factor in situations where the family is not judgment proof but especially vulnerable to the adverse health consequences of debt. Families caring for children with handicaps or chronic diseases or the elderly can’t afford diminished physical or psychological health.

I urge my clients to consider the non economic consequences of remaining in debt when making the decision whether or not to file bankruptcy.
Bottom line: a fresh start in bankruptcy may be good for your health.

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Cathy Moran, Esq.

I'm a certified specialist in bankruptcy law (California State Bar Board of Legal Specialization) practicing in the San Francisco Bay Area for more than 30 years. In addition to practicing bankruptcy law, I train new practitioners at Bankruptcy Mastery.

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