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Consumer bankruptcy could decrease with healthcare reform

On Behalf of | Feb 12, 2014 | Chapter 7 |

For many in Maryland, medical issues have led to the need for serious debt relief. The cost of an unexpected illness or injury can be extreme, and can set many families on a path toward consumer bankruptcy. When medical bills begin rolling in, a tipping point is ultimately reached when an individual’s ability to repay those debts is simply outpaced by new bills. Once that scenario has been reached, the options for lasting debt relief are few.

Some believe that healthcare reform could lessen these stressors, and allow more families to pay off their medical bills and avoid bankruptcy. One study looked at data from more than 400,000 participants, and analyzed the manner in which healthcare reform impacts financial stability. The healthcare reform measures that affected these participants came from one state’s attempts to find a healthcare solution, and is similar to the provisions laid out within Obamacare.

Researchers found that healthcare reform led to better credit scores for affected individuals. In addition, the overall volume of medical bills decreased when these reforms were put into place, as did the percentage of unpaid medical debt. Personal bankruptcy filing were also lowered when reforms were in place, suggesting that more people may be able to avoid bankruptcy once a national healthcare system such as Obamacare is put into place.

These findings are of interest to many in Maryland, but are of little help to individuals who are currently struggling under a mountain of medical debt. In such cases, the only way to climb out from under high levels of debt may be to file for consumer bankruptcy protection. Doing so can lead to the elimination of many form of consumer debt, including medical debt. Consumers can emerge in far better financial shape, and can begin rebuilding for the future.

Source: Mother Jones, Study: Health Care Reform Likely to Reduce Bankruptcy and Catastrophic Debt, Kevin Drum, Feb. 10, 2014

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