Distressed and Underserved Community

The majority of all bankruptcies are the result of medical bills according Medical Bankruptcy in the United States, 2007: Results of a National Study. . That's 20% higher than results indicated in 2001.

Of those who filed for bankruptcy in 2007, nearly 80 percent had health insurance. Respondents with insurance reported average expenses of just under $18,000. Respondents without insurance had average medical bills of nearly $27,000.

Since 2007, the number of Americans without insurance has increased and filing for bankruptcy has become more difficult due to more stringent laws, according to the report.

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.

In addition, the Federal Reserve released the 2009 List of Middle-Income Nonmetropolitan Distressed or Underserved Geographies, in which revitalization or stabilization activities will receive Community Reinvestment Act consideration as “community development.” The designations reflect local economic conditions, including such triggers as unemployment, poverty, and population changes.

Federal Financial Institutions Examination Council (FFIEC): The criteria used to designate these areas can be found here.