The Affordable Care Act imposes caps on medical expenses payable by consumers in Arkansas and elsewhere. However, indications are that the caps will not change the high rate of personal bankruptcy filings that are due to overwhelming medical debt. Knowledgeable observers predict that medical bills will continue to be a significant factor in over half of all bankruptcies filed.
Those earning less than 30,000 annually report that they can’t pay medical bills and save at the same time, according to a new Bankrate survey. Additionally, about 55 percent of people in all income brackets expressed worry that they won’t have available funds to pay for all of their medical expenses. One study says that medical bills were the biggest reason for bankruptcy filings in 2013.
A recent article in the Washington Post concludes that paying medical bills is still a big problem for Americans. For those who find the necessary funds to pay for excess medical bills, there may be critical sacrifices made in other areas of their life. However, there is a remedy under federal law that may be the right option for many persons who wish to put their overwhelming medical debt behind them and “start fresh.”
Fortunately for many persons, federal law provides a remedy for consumer debtors that allows them to wipe out usually 100 percent of all unsecured debt quickly and permanently. This includes medical bills and credit card debt. The right to that relief is provided to those who meet certain income requirements. Generally, the limitations are not unduly restrictive and most people suffering with massive unsecured debt will likely qualify for Chapter 7 relief.
Arkansas citizens can usually wipe out all credit card bills and medical debt in a Chapter 7 bankruptcy. In most instances, the debtors can retain their basic belongings, furnishings and cars through exemptions provided by law. Furthermore, debtors who are up-to-date on their home mortgage payments can in most instances file a Chapter 7, wipe out credit card and medical debt, and retain the home by continuing to pay on the mortgage.
Source: The Washington Post, “Why your fear of medical debt is entirely justified“, Jason Millman, Sept. 4, 2014