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Tennessee bankruptcy may offer medical debt relief

As many Tennesseans know, life is full of unexpected events that can wreak havoc on their personal finances. Some Tennesseans know firsthand that health problems can create some of the worst financial problems. Sometimes, income and savings cannot cover medical and related expenses and debts often pile up beyond the ability of a wage earner or household to pay. Eliminating such debts can become nearly impossible. One study notes that some 40 percent of Americans carry some health-care debt, and medical debt is the main reason people file for bankruptcy protection and debt relief.

According to NerdWallet, a company specializing in financial advice, medical insurance often is not enough to cover actual expenses from such events as surgery, especially when out-of-network care providers are used. Some 63 percent of Americans say their medical bills were much higher than they expected. Such medical debt costs Americans three times as much as combined bank and credit-card debt combined, and almost 20 percent of Americans heard from debt collectors in 2014. Altogether, these collectors gathered an estimated $21 billion.

Hospital billing errors contribute to the debt problem, especially when patients do not examine their bills closely. Closer looks at many hospital bills will likely show errors that add significantly to debt. In addition, hospitals around the country have staggeringly different charges for virtually identical procedures. For one type of hospital treatment examined by NerdWallet, the highest charge (in California) was 54 times the lowest charge (in Arkansas).

The study clearly shows the magnitude of the health-care financing problem. This is why bankruptcy can be so important in helping people find relief from medical debt. Any Tennessean who faces such crippling debt should consult with a legal specialist who can determine whether filing for bankruptcy will provide relief and prevent further financial complications.

Source: Cnbc.com, "Medical Bills Are the Biggest Cause of US Bankruptcies: Study," accessed on Dec. 23, 2014

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Kenneth C. Rannick, P.C.
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