Big Lottery hits are not necessarily defenses against bankruptcy

Hit it big in the state lottery? Well we might see you in bankruptcy court in a few years anyway.

Researchers have looked at whether winning the lottery in Florida prevented people from going bankrupt. Although winning big (from $50,000 to $150,000) helped stave off bankruptcy in the first couple of years, the odds of declaring bankruptcy jumped back up three to five years after winning. The winners do not appear to have accumulated a lot of important assets; instead, their bankruptcy filings suggest they simply blew through the money.

The forthcoming study in the Review of Economics and Statistics was authored by Prof. S. Hankins and is titled “The ticket to Easy Street? The Financial consequences of winning the lottery.”

So the next time you drive by Ted’s Mobil in Methuen (right on the New Hampshire line, it’s the area’s biggest lottery ticket seller), just think that even the eventual winners don’t necessarily have it made, and still may end up in bankruptcy court.

 

By Doug Beaton

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