Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

Can Bankruptcy Make You Smarter?

Intuition tells us that debt causes difficult health problems, and in recent years researchers have carefully established this fact. One study even found that debt can kill people: As many as 12,000 Americans died because of debt during the great recession. Scientists are also exploring the effects of poverty on cognition, and the results are unsettling if understandable: Poverty can cripple cognition. The implication for debtors is that New York bankruptcy can ease not only stress symptoms but also mental impairments caused by too much debt.

In an article appearing in Science in 2013, researchers asked participants randomly chosen in a New Jersey mall how they would decide to pay for a car repair that cost either $150 or $1,500. The participants’ annual incomes ranged from $20,000 to $70,000. Before letting them answer, though, the researchers tested the participants’ cognitive abilities with simple, unrelated questions. Those who were asked about the $150 car repair did fine on the tests, but the lower-income participants performed very poorly after the researchers told them the repairs would cost $1,500.

The researchers duplicated the experiment in a different context by working with farmers in Tamil Nadu, India. The farmers typically receive 60 percent of their incomes after a single harvest, so they are poorer the rest of the year. As with the New Jersey mallgoers, farmers tested before the harvest payments performed more poorly on the cognitive tests than those tested afterwards.

The authors of the study commented that the results occurred irrespective of other factors, such as time, nutrition, work effort, or even stress. They conclude that concerns about poverty sap individuals’ finite mental capacity and create mental blocks that prevent them from taking further steps to lift themselves out of poverty, like taking night classes.

The Science article is here (subscription required).

The researchers also discussed the implications for public policy, but one policy that’s already available for indebted poor people is bankruptcy. If you are struggling to pay your bills, then discussing your situation with an experienced New York bankruptcy lawyer start you on the path of relieving you of the cognitive burdens debt is causing you.

For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA
718-855-6840
http://nybankruptcy.net/

Recent Posts

Beware Grace Periods, Debtors

Too often, debtors see grace periods offered by lenders as free benefits. “Grace” makes it sound so innocent. However, debtors who routinely rely on grace periods when making payments will find themselves facing financial difficulties that might lead to bankruptcy. The reason is that although creditors offer grace periods to debtors, they also use them

Read More »

Bankruptcy May Not Rescue You From Vicious Personal Disputes

Bankruptcy is a technical process that assumes everyone working within it is mostly rational. To the extent that it expects parties to deviate from irrational behavior, the Bankruptcy Code and its accompanying rules include incentives to keep parties in line. Creditors are usually large and impersonal, and they rarely care if their debtors file bankruptcy.

Read More »

Non-Lawyers’ Explanations of Bankruptcy May Be Wrong

Do you have financial problems? Do you tend to ask your friends for advice? Is one of your friends an experienced New York bankruptcy lawyer who will explain the process for you? Are your friends otherwise knowledgeable people? The answer to these questions may be, “Yes but you don’t know it.” Although many bankruptcy lawyers

Read More »

6 Steps to Take Before Filing Bankruptcy

Leaving your case to an experienced New York bankruptcy lawyer is not the only step on the to-do list before filing bankruptcy. There are many things debtors should do (and not do) before they file, and the more organized and mindful debtors are, the easier the process will be and the more effective the result.

Read More »

Social Security Number Not Necessary for Bankruptcy

A question that’s commonly asked about New York bankruptcy is whether a debtor needs a Social Security number to file. Debtors ask because they sometimes run across the bankruptcy form title, “Your Statement About Your Social Security Numbers” (B 121), which asks debtors to list their current and prior Social Security numbers. The new bankruptcy

Read More »

How Can a Debtor (or Creditor) Get a New Trustee?

The trustee in a New York bankruptcy case is usually not the debtor’s ally. His or her purpose is mainly to administer the bankruptcy estate or ensure the debtor’s repayment plan goes according to plan. Trustees pursue preference payments, fraudulent conveyances, and other malfeasance committed by debtors. They frequently initiate adversary proceedings against debtors. In

Read More »
Scroll to Top