Americans are increasingly at risk of financial ruin due to illness and medical expenses, according to a new study released yesterday by the American Journal of Medicine. The researchers found that illness or medical bills contributed to nearly two thirds, or 62 percent, of all bankruptcies in 2007—before the major impact of the housing collapse and current economic downturn. That’s a 50 percent increase over a similar survey in 2001 by the same researchers.

Most of the debtors are middle aged, middle class and have a college level education, and each of them has their own story. Take Donna, from Chicago (right) who told us her bankruptcy story during our Cover America Tour. Donna’s husband had already been diagnosed with a heart condition, and when she found out she had uterine cancer, their out-of-pocket costs shot up to $9,000 a year. When they fell behind on their bills, one of her doctors sued to garnish her wages, which forced her and her husband into bankruptcy. They ended up losing their house, she gave up her job at a newspaper, and they moved into their daughter’s basement until they could afford a small apartment.

As in this case, unaffordable bills directly contributed to 92 percent of medical bankruptcies, and loss of income due to illness caused 40 percent. Many people lose their heath insurance after suffering an illness or injury. A quarter of businesses that offer health insurance cancel coverage immediately when an employee suffers a disabling illness, and 25 percent more cancel coverage within a year, according to the study.