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Presidential candidates spar over medical debt

Polls reveal that health care is the issue that voters in Tennessee and around the country care about the most, so it is not surprising that the cost of medical treatment in the United States was discussed at length during the Jan. 14 Democratic presidential debate. During the debate, Senator Bernie Sanders claimed that about 500,000 Americans file a personal bankruptcy each year because of overwhelming doctor or hospital bills. Data from the Consumer Bankruptcy Project backs up this statement.

After scrutinizing 910 Chapter 7 and Chapter 13 bankruptcy petitions submitted between 2013 and 2016, CBP researchers discovered that medical debt or income lost as a result of an injury or illness was the primary factor about two-thirds of the time. This suggests that approximately 530,000 health care-related bankruptcies are filed in the United States each year.

The candidates also talked about improvements that could be made to the Affordable Care Act. The landmark legislation was passed in 2010 partly to prevent Americans from being burdened with unpayable health care bills, but the data suggests that the ACA has failed to make much of a difference in this regard. A CBP study conducted prior to the ACA's passage found about the same percentage of personal bankruptcies linked to medical debt. Senator Elizabeth Warren contributed to that study.

Individuals struggling with unmanageable debt are often reluctant to pursue bankruptcy because of unfounded fears, myths and misunderstandings. Attorneys with experience in this area may clear up confusion about debt relief and point out that the bankruptcy code was written to give Americans second chances. Attorneys may also explain that an automatic stay is issued when an individual files for bankruptcy that orders creditors to cease all of their collection efforts and is designed to put an immediate end to wage garnishments, debt-related lawsuits and daily harassment.

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