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Bankruptcies from medical debt may be on the rise

Washington readers may know firsthand how expensive medical care is and how overwhelming medical debt may be. In fact, medical debt is one of the leading causes for personal bankruptcies, surpassing credit card debt and defaulting on mortgages. Although many Americans may assume that the Affordable Care Act will resolve some of these problems, medical debt may continue to be a problem for many years.

Many of the people who file for bankruptcy from medical debt actually have health coverage. It is simply that the extent of their medical needs exceeds what the insurance would cover. As a result, they are left with medical bills, and many Washington readers may understand how difficult that can be when there may be no way to pay off the debts.

When a person's debt far outweighs his or her ability to earn enough money to pay them off, it can seem like a hopeless situation. However, two different types of bankruptcy may be a viable option for certain financial situations. Chapter 13 may be a way for a person to consolidate debts into one amount to be paid off in installments. Chapter 7 may be a good option for those who have no hope of paying off debt a little at a time or who only wish to claim bankruptcy for certain debts.

Medical debt is a problem in the United States, and it is important for consumers to know what their options may be. When exploring bankruptcy options, an evaluation of the individual's financial situation may be necessary. The best choice will differ on a case-by-case basis.

Source: Fox Business, Medical Bankruptcies are Still a Problem, Here's What to Expect, Donna Fuscaldo, Feb. 18, 2014

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