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.