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Bankruptcy in New Jersey: Medical debt weighs heavy on consumers

The cost of healthcare in our country continues to rise. Combine that with the fact that many New Jersey residents don't have adequate health care coverage, if they have any at all, and the result is that there are a lot of people unable to pay their medical bills. Many patients have filed bankruptcy in order to find some relief from large amounts of medical bills.

A survey done by the Commonwealth Fund indicated that last year alone approximately 41 percent of surveyed adults ranging in age from 19 to 64 reported have a "substantial amount" of medical bills that they are paying over time or unable to pay at all. Of those people, 29 percent are shouldering medical debt over $4,000 while another 16 percent have medical bills that are more than $8,000. Even patients that have medical insurance end up struggling due to inadequate coverage.

At least a portion of those percentages should go down next year when the Affordable Care Act goes into effect since adult children age 26 and under will be able to stay on their parents' healthcare plans. People that are under-insured or uninsured will have more access to coverage under the act as well. Another act that has been proposed in Congress is the Medical Debt Responsibility Act. This act would remove medical debt from the creditworthiness equation used by credit bureaus. It would also impose a deadline on credit bureaus for removing previously past due, but subsequently paid off, medical debt from an individual's credit report.

It remains to be seen whether these changes will in reality do what they are intended to do. In the meantime, people in New Jersey that are struggling with medical debt may want to consider filing bankruptcy in order to have that debt discharged. If the debt is discharged, it could mean a brand new financial start.

Source: The Dallas Morning News, "Millions struggling with medical debt," Pamela Yip, May 12, 2013

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