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Health care law appears to have improved economic health

Some people still believe that bankruptcy is often caused by a failure to control spending. They believe all that is needed is a little self-discipline and these financial problems would be alleviated. Until they get sick.

Healthcare can be very expensive and when people become ill, they have little control over many aspects of the course of their illness or the cost of the treatment. A serious illness can also lead to a loss of income, doubling the financial damage. When medical costs spiral out of control and income is lost, it often leads to a bankruptcy court filing.

There has been much debate on what degree medical bills have caused bankruptcy for Americans. One study suggested that 61 percent of bankruptcy filings were, to some degree, due to medical expenses. The Affordable Care Act was designed to help reduce some of those bankruptcy filings by providing insurance coverage to many who had previously had no coverage.

A recent study suggests that while the number of bankruptcy caused by medical bills is lower than 61 percent, it is still the single largest component of bankruptcies and that it may cause one-quarter of all filings. It also found that the ACA did appear to be one of the factors that have led to a decline in bankruptcy filings.

If you qualify for a Chapter 7, meeting the income limitations of the means test, a Chapter 7 can be a useful to help recover your financial health if your health insurance did not provide adequate coverage. In about six months, a Chapter 7 can lead to a discharge of overwhelming debts that a surgery or a week in a hospital can bring.


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