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Affordable health care may reduce medical debt bankruptcies

There are numerous reasons consumers file for personal bankruptcy, from unemployment to credit card debt. Crippling health care costs have also been a top reason for bankruptcies with families in Washington, D.C., as well as the rest of the country. In fact, there have been many studies suggesting medical debt is the number one reason for consumer bankruptcy across the country.

A law professor from Northeastern University believes that the Affordable Health Care Act may lessen the burden for many Americans. Health insurance has been required for Massachusetts residents since 2005. The professor discovered that people in Massachusetts have about $3,000 on average in medical debt, as opposed to about $8,500 elsewhere in the country. Massachusetts is the only state in which medical debt is not cited as the top reason for personal bankruptcy. In that state, only 3 to 9 percent of bankruptcies are due to medical debt.

Additionally, bankruptcy rates in Massachusetts are dropping faster than in other states. The Boston law professor thinks that having affordable health insurance may contribute to a more stable financial setting for families.

It may still be too early to tell how Obamacare impacts consumer debt across the United States, and how it can affect those hoping for debt relief. Even so, there may be reason for many residents in Washington, D.C., to hope that the results of this study signal promise for less financial stress in the future. Those who are suffering from unmanageable consumer debt may find it helpful to speak with a bankruptcy attorney.

Source: The Wall Street Journal, "The Future of Personal Bankruptcy in a Post-Obamacare World," Katy Stech, July 1, 2015

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