For many people who struggle with debt in Tennessee, filing for bankruptcy ends up being their best option. Bankruptcy can be an opportunity to wipe one’s financial slate clean and start over again without past debts hanging overhead. While the reasons may vary from person to person, a common cause that leads people to incur large bills that they cannot afford is medical expenses. In fact, according to USA Today, medical debt is the number one reason that people file for bankruptcy.
However, the number of personal bankruptcies in the United States has dropped significantly over the last six years. In 2016, there were 770,846 bankruptcy filings compared to 1,536,799 in 2010, according to Consumer Reports. In addition to new regulations regarding bankruptcy and an improvement in the economy after the Great Recession, some are attributing this steep decrease to the Affordable Care Act since it went into effect during that same time period.
Since the ACA decreased the overall number of people who did not have insurance coverage, many of those who were newly covered likely did not incur as many out of pocket medical expenses as they would have without insurance. Having insurance allows people to better predict what their medical costs will be and greatly reduces the possibility of being hit with an unexpected bill.
The issue of health care is sure to remain a hot topic as the Trump administration works to pass a replacement for the ACA. It remains to seen how another overhaul in the health care will affect the number of people filing for bankruptcy across the nation.