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Many bankruptcy filings are due to medical debt

Anyone in New Jersey who has been to a doctor recently, paid an insurance premium or obtained a prescription understands the rising costs of medical care in the United States. In fact, many bankruptcy filings are due to medical debt -- either directly or indirectly. Patients who suffer from chronic conditions requiring monthly regimens of pills most likely feel as if there is no end in sight to their financial obligations.

To make matters worse, many insurance plans -- whether obtained through an employer or through the Affordable Care Act -- require an increasing amount of out-of-pocket payments from individuals. While costs for insurance premiums and medications increase, income is often not growing to compensate for the extra expense. Many people who need their medications to control chronic illnesses turn to credit cards to fill the void.

After a while, this short-term solution produces long-term debt issues. A point may come where a decision concerning what to pay and what not to pay will have to be made each month. For some people, the situation reaches the point where purchasing food or medications -- not both -- becomes a dilemma.

When debt becomes that overwhelming, it cannot be good for a person's health, which could create a vicious cycle that only continues in a downward financial spiral. Filing for bankruptcy could provide New Jersey residents in this position with the time and breathing room they need in order to handle their financial issues. The fresh start that a bankruptcy can provide could relieve some of the stress that may have exacerbated an individual's condition and lay the groundwork for a fresh start free of unmanageable debt.

Source: CNBC, "Medication costs fuel painful medical debt, bankruptcies", Dan Mangan, May 28, 2014

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