Personal bankruptcy filings have been on a steep decline in the last six years, and that’s a great sign for many Americans across the country that have been in — and know — stressful financial situations. In the last six years, personal bankruptcy rates have dropped roughly 50 percent. But what is driving this decline in bankruptcy filings?
It is difficult to exactly pin down a cause for this decline. When you file for bankruptcy, there is no question or requirement that forces the filer to disclose the reason why he or she is filing for bankruptcy. However, there are some educated guesses that can be made, and without getting to deep into the political side of the issue we’re about to raise, it seems to be a solid indicator as to why bankruptcy rates are declining.
The Affordable Care Act has drastically increased the number of people who have medical insurance, and as a result, there are fewer people that are dealing with immense medical debt. Since medical debt is such an unexpected and dramatic cost in most cases, it is understandable that when you increase insurance coverage, you reduce the debt that people carry as a result of medical debt.
Even with the Affordable Care Act on the books (though that could change soon), there are still people out there that carry a heavy medical debt burden. Bankruptcy can go a long way to helping people with their medical debt.
Source: KSAT, “Obamacare credited with reducing bankruptcy rates,” June 20, 2017