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Bankruptcy Help For Everyday People

Candidates discuss medical debt during presidential debate

North Carolina residents who watched the Jan. 14 Democratic presidential debate may have heard Senator Bernie Sanders say that about 500,000 Americans file for bankruptcy each year because of medical debt. Sanders based his claim on the results of a recent survey of 910 personal bankruptcy cases conducted by the Consumer Bankruptcy Project. The advocacy group concluded that more than 65% of the people who file a Chapter 7 or Chapter 13 bankruptcy each year do so because they have medical bills they cannot pay or found themselves in an unmanageable financial situation after an illness or injury.

The CBP study suggests that the Affordable Care Act has done little to address the issue of medical debt in the United States as all of the bankruptcies studied were filed after the landmark law's passage. A previous study conducted by the group before the ACA was signed into law by President Obama linked roughly the same percentage of bankruptcies to medical debt. Senator Elizabeth Warren, who is one of the candidates running against Sanders for the Democratic presidential nomination, contributed to that study.

Other researchers have reached different conclusions. A 2018 study published in the New England Journal of Medicine suggests that the income lost because of a medical crisis is more financially damaging to Americans than doctor or hospital bills. However, most researchers agree that the problem is growing. A study published by the Journal of General Internal Medicine in 2019 revealed that more than 135 million people in the United States are struggling with medical debt, and Health Affairs published a study in 2018 that put the number of Americans with a past-due medical bill at about one in six.

Attorneys with experience in this area could explain how pursuing debt relief by filing a personal bankruptcy offers the chance for a fresh start and puts an end to harassment from debt collectors and creditors. Attorneys could also address the many myths surrounding bankruptcy and explain the differences between a Chapter 7 or Chapter 13 petition and alternatives like debt consolidation and debt settlement.

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