Jay Westbrook, a University of Texas law professor who co-wrote the 1981 bankruptcy study, believes bankruptcy patterns are an indicator of other social problems--high unemployment, rising divorce rates (people often file for bankruptcy after a divorce) and, in this case, a crumbling healthcare system. "Bankruptcy occurs when there is a crisis. That's what it's there for," Westbrook says.

A study by the Center for Studying Health System Change shows that 20 million families struggled with medical debt in 2003. Federal projections suggest that out-of-pocket health expenses will rise at least until 2013. Elizabeth Warren and Steffie Woolhandler foresee medical bankruptcies continuing to climb as the uninsured population swells, overburdened hospitals aggressively collect to meet the bottom line, prescription drug prices increase and employers shift medical costs to employees.

The only real cure for the medical bankruptcy epidemic, according to Physicians for a National Health Program, is national health insurance--a system where coverage isn't linked to employment and medically necessary care is accessible to all without deductibles or copayments. If such sweeping reform seems a long way off, there are short-term fixes too. One would be to exempt medical debtors from any new laws restricting bankruptcies. "The bankruptcy courthouse doors must stay open for those who really need it," says Warren. Another worthwhile improvement, notes Henry Sommer, president of the National Association of Consumer Bankruptcy Attorneys, would be to better protect the homes of medical debtors; many states allow people only a small amount of home equity after they've gone bankrupt.

But even modest measures to protect medical debtors face an increasingly unforgiving environment. Although the recent litigation will likely force some hospitals to rethink collection practices, there's evidence they are finding other ways to reclaim money, like pushing debtors toward lenders and hospital-sponsored credit cards. And the bankruptcy reform pending in Congress could hurl many more middle-class Americans into lifelong debt.

Rose Shaffer, for one, is still reeling. She works two nursing jobs, seven days a week for nearly sixty hours, so she can make the monthly $2,088 in Chapter 13 payments she still owes. Advocate has yet to claim its portion, but Shaffer's credit is severely damaged and will be for the next decade. She's praying her eleven-year-old car will make it through the Chicago winter.

"Sometimes I would start crying. I wished I was dead, but I was too big a coward to kill myself," Shaffer says. "I never thought my life would end up like this."

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