U.S. Treasury: Puerto Rican Government Could Shut Down If Denied Bankruptcy

The U.S. Treasury Department is warning of a potential government shutdown in Puerto Rico and lengthy litigation if Congress doesn't approve a bankruptcy mechanism for the U.S. territory soon, the Associated Press reported today. The counselor to the U.S. Treasury secretary issued the warning today as House Republicans held hearings during a final push to address the island's failing economy. Antonio Weiss said that he envisions a debt-restructuring plan that would temporarily suspend litigation to prevent a shutdown of basic government services on the U.S. territory and give time for voluntary negotiations with debt-holders. He said it would also create a voting mechanism to prevent a handful of officials from blocking a reasonable compromise. Weiss said that an independent federal oversight board is needed if a bankruptcy mechanism is approved. Click here to watch a replay of the hearing and to read Weiss's prepared hearing testimony.

The House Financial Services Subcommittee on Oversight and Investigations held a separate hearing today titled "Puerto Rico's Debt Crisis and Its Impact on the Bond Markets." Click here to watch a replay of the hearing and read the prepared witness testimony.

For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.

New York Fed: Consumer Debt Rising with Age

An analysis by the Federal Reserve Bank of New York found that the amount of debt held by consumers in the U.S. as they age is rising, CollectionsCreditRisk.com reported today. From 2003 to 2015, the amount of debt of borrowers between ages 50 and 80 increased by approximately 60 percent, according to the Fed's researchers. The analysis reviewed data from the New York Fed Consumer Credit Panel. Researchers also found that aggregate debt of younger borrowers declined modestly from 2003 to 2015 "with a debt portfolio reallocation away from credit card, auto, and mortgage debt, toward student debt."

A special "Eye on Bankruptcy" session on April 16 at ABI's Annual Spring Meeting will focus on student debt, pension debt and housing debt and their impact on retirement. To register for ABI's Annual Spring Meeting, please click here.

New Study Questions Retirement Planning Calculators' Accuracy

A new academic study of 36 online retirement planning tools -- many of them widely used -- concludes that "in most cases, the available offerings are extremely misleading" and generally not helpful to consumers trying to figure out if they will have enough money to cover their expenses for the rest of their lives, the Wall Street Journal reported yesterday. The study was conducted by three researchers at Texas Tech University, including well-known financial adviser Harold Evensky, and a fourth researcher from Utah Valley University. They looked at the guidance the various free and low-cost calculators provided to a hypothetical couple in their late 50s earning $50,000 each and aiming to retire at ages 65 and 63. Using software for financial advisers by MoneyGuidePro, the researchers concluded that the couple has only a 53 percent probability of having enough money. Yet more than two-thirds of the retirement tools indicated that the hypothetical users could retire with a significant confidence -- defined as 70 percent or greater odds -- of having enough money to last for the rest of their lives, or made statements such as "Congratulations, you can retire," the researchers write in a paper, which they have submitted to an academic journal.

Analysis: Bad Debt Is the Pain Hospitals Can't Heal as Patients Don't Pay

Hospitals have long struggled to collect bills when patients aren’t covered by insurance -- creating delinquent accounts. The Affordable Care Act was supposed to relieve some of that strain by helping pay for coverage for millions of Americans and expanding Medicaid in some states to cover the poor. Yet while millions of people have gained coverage since Obamacare became law in 2010, there's also been an increase in insurance that comes with high deductibles and cost-sharing, Bloomberg News reported yesterday. Under those plans, the first few thousand dollars of annual medical expenses come out of patients' wallets. The rate of uninsurance in the U.S. has fallen to 9.1 percent from 15.7 percent in 2009. Yet in the first nine months of 2015, about 36 percent of the U.S. insured were covered by high-deductible or consumer-directed health plans that can require considerable out-of-pocket payments, compared with about 25 percent in 2010, according to a CDC survey.

For more on hospital and health care insolvencies, be sure to pick up a copy of ABI's Health Care Insolvency Manual, Third Edition from the ABI Bookstore.

Get a Behind-the-Scenes View of Detroit's Bankruptcy on Latest ABI Podcast

ABI Resident Scholar Melissa Jacoby talks with Nathan Bomey, a USA TODAY business reporter and former Detroit Free Press reporter, about his experiences covering Detroit's chapter 9. Bomey, author of the forthcoming book Detroit Resurrected: To Bankruptcy and Back, shares his unique perspective of Detroit's chapter 9 case and provides his outlook for the city's recovery.

Pre-order your copy of Bomey's Detroit Resurrected by clicking here. (Expected released date: April 25.)