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Medical Bills May Surpass Credit Card and Mortgage Debt as Leading Cause of Bankruptcy

Posted By Allmand Law Firm, PLLC || 27-Mar-2014

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A recent study continues to confirm one of most leading causes of consumer bankruptcy: medical bills. Yet, the study also brought to light other significant points that may hint medical bills may become the number one reason why bankruptcy is filed. Unpaid medical bills may surpass mortgage debt and credit card debt for various reasons, despite more people getting access to healthcare insurance.

The Affordable Care Act, also known as Obamacare, is helping millions of Americans obtain health insurance, with a large number of consumers being able to obtain healthcare coverage for the first time in years. But many bankruptcy filings that have occurred in recent years were due to consumers unable to pay medical bills. Roughly 78 percent of people who file bankruptcy due to overwhelming medical debt had health insurance.

A 2013 study completed by NerdWallet Health showed evidence of medical debt possibly becoming the number one cause of bankruptcy over credit card debt and mortgage debt. High insurance deductibles, copays, and medical costs make it difficult for families to manage necessary household needs and put further stress on finances. Americans who were forced out of a job may have tried to continue medical coverage through COBRA, though these payments alone are a challenge especially if you have been laid off.

Experts believe medical expense rates have grown so quickly they have gone above inflation. Making it a dominate force many consumers are forced to deal with. Also known as a medical bankruptcy, consumers considering filing because of medical debt should review their filing options closely with an experienced bankruptcy attorney.

Reference: http://www.foxbusiness.com/personal-finance/2014/02/18/medical-bankruptcies-are-still-problem-here-what-to-expect/

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