Most of the people in New York and around the country who file personal bankruptcy do so because of overwhelming medical debt, and many of them find themselves in an unsustainable financial situation after losing their health insurance coverage. Individuals often lose their health insurance after leaving a job or going through a divorce, and a coverage gap of only two years makes bankruptcy twice as likely according to a recent study.
Researchers from the University of Denver and the University of Missouri discovered the link between health insurance coverage gaps and personal bankruptcy filings after examining 12,500 Chapter 7 and Chapter 13 cases using data from the Bureau of Labor Statistics. The study worries experts because about 20 million Americans could lose their health coverage if the Affordable Care Act is ruled unconstitutional. The matter is currently before the U.S. Court of Appeals for the Fifth Circuit.
Other studies dealing with health care in the United States make for equally grim reading. A poll conducted by the Kaiser Family Foundation revealed that more than one in three Americans who have health insurance struggle to cover their deductibles, and more than half of the respondents said that they or a family member had put off a doctor or dentist visit in the last 12 months because of the costs involved.
Individuals struggling with doctor and hospital bills are often reluctant to pursue debt relief because of the many myths and misconceptions surrounding personal bankruptcy. Attorneys with experience in this area may put these myths to rest and explain how the bankruptcy code is designed to provide second chances to Americans experiencing financial difficulties. Attorneys may also explain that filing a Chapter 7 or Chapter 13 petition will generate an automatic stay that puts an end to harassment from debt collectors, wage garnishments and debt-related lawsuits.