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Medical debt is the leading cause of personal bankruptcies

About 530,000 people around the country file for bankruptcy each year, and most of them do so because of overwhelming medical debt. A recent academic study revealed that two out of three personal bankruptcies are tied to medical debt, and many Virginia consumers who seek debt relief every year because of doctor or hospital bills had health insurance that proved to be inadequate.

Lawmakers thought they had addressed this problem when they passed the Affordable Care Act in 2010, but the figures suggest that the landmark law has made little, if any, difference. Many Americans turn to credit cards to pay unexpected medical bills or cover their basic needs when an injury or illness prevents them from working, but this often leads to a downward spiral of inescapable debt.

Some doctors and hospitals have payment plans available for patients who do not have health insurance or have insurance that does not cover the treatment they need, but these plans are not usually advertised and few patients know that they can ask for them. Uncovered medical bills can sometimes be avoided by having referrals in hand before making appointments and ensuring that physicians and health care facilities are in-network. Americans should also ask questions and read the fine print when choosing a health insurance plan.

The nation's bankruptcy laws offer an escape from crushing debt and provide the opportunity for a fresh start, but many people are reluctant to file a Chapter 7 or Chapter 13 petition because of the many myths surrounding debt relief. Attorneys with experience in this area could clear up these misunderstandings and explain that filing for bankruptcy may actually improve credit scores. Attorneys could also point out that the automatic stay issued when a bankruptcy is filed puts an end to daily harassment from debt collectors.

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