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Using bankruptcy to resolve medical debt

Because the new Affordable Care Act only recently started to take effect, unanticipated medical expenses still hurt the household budgets of many Americans in 2012, including Tennessee residents.

According to data released recently by the Centers for Disease Control and Prevention, 26.8 percent of American families - more than 1 in 4 - suffered financially, with medical expenses creating the most hardship. Almost nine percent of Americans were unable to pay medical bills, and more than 20 percent of respondents were still paying off longstanding medical bills on an ongoing basis.

Minimal health insurance or no insurance was the main problem for the hardships. Fewer than half of all adult respondents said making payments was difficult given their current income. Completely uninsured families fared even worse, and some 40 percent admitted having problems making payments.

Households with children also had trouble. One-third of these admitted to having trouble in the previous year. Families with children less than 17-years-old were also unable to pay medical bills during the survey period. Only some 30 percent were making payments on a regular basis. As might be expected, families with the lowest incomes were the hardest hit.

One expert explained that the Affordable Care Act will help lower medical expenses for some people and will expand insurance coverage to 48 million Americans who have not had health insurance. But others argue that in order to cover costs, insurance companies have raised their minimum deductibles, and many families will not be able to meet those costs.

Unpaid medical expenses can often seem insurmountable either way. For Tennessee residents who face this sort of problem, bankruptcy can be a way to overcome financial challenges. Consulting a bankruptcy law attorney can help determine whether a resident meets the qualifications and what category would best fit a resident's situation.

Source: CBS News, "More than one-fourth of American families faced financial burden due to medical costs," Michelle Castillo, Jan. 29, 2014

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
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