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Soaring medical debt may lead to more bankruptcy filings

Even as New Jersey residents continue to recover from the recession, the cost of living continues to rise. Even with the new health insurance policy, many people are still unable to pay for the rising cost of medical care. As the amount of medical debt increases, so may the number of bankruptcy filings.

Estimates indicate that somewhere in the neighborhood of 51 million people nationwide have medical debts in collections. This number equates to approximately one out of every five Americans. A study done regarding the cost of 100 of the most commonly performed procedures at hospitals across the country revealed that New Jersey is one of two states where the debt is the highest.

However, not only the cost of care drives up an individual's medical debt -- billing errors seem to be more commonplace than they should be. This means that a patient could potentially be paid more than he or she should for already expensive health care. Even if the error is noticed, the debt could potentially go to collections before any discrepancies are corrected.

If an individual incurs a substantial amount of medical bills after a sudden illness or accident, he or she could end up owing thousands of dollars even with health insurance. This would undoubtedly put a significant strain on his or her finances.  In addition, he or she would then be subjected to numerous phone calls and other correspondence from collections agents attempting to get him or her to pay the bills. Filing for bankruptcy could eliminate that debt and relieve the stress created by it.

Source: Fox News, "1 in 5 Americans will have medical bills in collections this year, study shows", Lacie Glover, Oct. 8, 2014

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