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  • Bankruptcy
  • Clint W. Smith, P.C.
  • No Comments
  • April 29, 2014


New research appears to show that the Affordable Care Act (ACA) may reduce the need for personal bankruptcy. I know, too many words in that sentence can be fudged. But that’s all we have at present, folks.

Apparently, people in Massachusetts are now less likely to fall behind in paying medical bills than their New England neighbors. One explanation is that the mandatory healthcare law there, the one upon which ObamaCare (ACA) is modeled, has enabled people to pay their bills because they are covered by insurance. Consequently, the researchers reason, Massachusetts has lower rates of personal bankruptcy.

Of course, many factors play into the decision to file for bankruptcy protection. One problem with the researchers’ conclusion is that they assume that medical bills are a primary cause of personal bankruptcy. To borrow a phrase from the past “it’s the economy, stupid.” Let us not forget that, coincidental to all this research – while medical costs continued to escalate – we had a recession. Many people lost their jobs, and many of those who were lucky enough to find employment are paid a fraction of their previous income.

In my practice, it is true that many people – indeed, a majority – include medical bills. But they are rarely, if ever, the cause of the bankruptcy filing. Many would say (and have said) that if medical bills were the only debts they owed, they would pay or settle them instead of filing bankruptcy. That is actually very common: Medical providers are typically pretty amenable to working out payment plans or settlements with patients. It’s the aggressive creditors who want to repossess cars, foreclose on homes or garnish wages that motivates people to come to my office and talk about bankruptcy.

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