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Growing medical debt often leads to bankruptcy

Medical debt affects over 137 million Americans in North Carolina and across the country. Despite the passage of the Affordable Care Act, many people face expensive medical bills that they are unable to repay. According to one study, medical bills are the primary reason for people of any age to cash in their retirement savings or 401(k) plans or take even more serious action to address a financial crisis. Research indicates that two-thirds of all bankruptcy filings across the country are at least partially linked to significant amounts of medical debt.

People who have lost their insurance for a number of reasons - including some people with bills that date back to before the health care "Marketplaces" - may find themselves facing escalating medical debt, especially if they face a serious medical crisis that requires hospital care. Even people with insurance may have high-deductible plans, require out-of-network coverage or need costly prescription drugs. People often face high bills from hospitals that may not be fully descriptive. In addition, some hospitals, often planning their pricing for insurance companies, may charge far more than others for the same surgery or treatment. Research has also shown that more expensive hospitals do not provide a higher quality of care.

Of course, many people face hospitalization in an emergency situation when they cannot shop around to choose a provider. People saddled with hefty medical bills may try to negotiate their debts with the health care provider. Some hospitals will agree to accept lower payments if they know that the patient does not have insurance, while others will funnel people to a charity program.

In some cases, however, people may simply find themselves facing an insurmountable debt from massive medical expenses. A bankruptcy lawyer might provide advice on Chapter 7 and Chapter 13 bankruptcy for debt relief.

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