Medical debt is a factor in about two-thirds of personal bankruptcies filed in Oregon and around the country according to a study published recently in the American Journal of Public Health. The analysis of approximately 530,000 families pushed into inescapable debt by illness or injury is seen as significant as it is the first major study of its kind conducted since the passage of the Affordable Care Act in 2010. One of the primary goals of the landmark health care bill was to reduce and prevent medical debt-related bankruptcy filings.

After scrutinizing 910 personal bankruptcies filed between 2013 and 2016, the researchers discovered that medical bills prompted 58.5 percent of the petitioners to seek debt relief. Income losses caused by an injury or illness were cited as a reason in 44.3 percent of the bankruptcy cases, and many petitions revealed that both hospital expenses and lost wages played a role.

Some experts blame the problem on health insurance policies that use a complex web of copayments and deductibles to place an unreasonable financial burden on to consumers. Another problem with health insurance is that it is often provided by employers. Health care costs are a significant issue for many American companies, and workers with long-term and expensive medical conditions are often terminated to keep costs down.

Unfortunately, many people struggling with unmanageable financial situations do not pursue bankruptcy because of myths, rumors or misunderstandings. Attorneys with experience in this area might explain how the bankruptcy laws were drafted to offer an escape from crushing debt and not to punish individuals who may have made unwise decisions. Lawyers may also point out that filing a Chapter 7 or Chapter 13 bankruptcy petition will generate what is known as an automatic stay that puts an immediate stop to harassment from bill collectors and legal action from creditors.