At one of the first bankruptcy meetings of creditors I ever attended as a lawyer, a young couple appeared for questioning by the Trustee and Judge Ruth Kinnard.

It was more than 40 years ago. I did not know what was routine then, but today I know that what I saw was just as normal as anything gets in the world of insolvency.

“You have more than $375,000 in debt,” Judge Kinnard said. “What happened? You are young. It doesn’t appear to me you have lived long enough to owe this much.”

“Your honor,” the woman responded, “our baby was born with an open spine. She lived for six months.” Her husband put his arm around her in comfort as she wept uncontrollably.

When I started appearing in bankruptcy court, I represented creditors. In 1978, the Court appointed me to the Chapter 7 Trustee panel in Nashville and I have been serving ever since. My responsibilities include reviewing the debts and assets of those who file for bankruptcy. I see firsthand the causes of bankruptcy in action.

Some are self-inflicted. Some are the product of outrageous financial fortune completely outside the control of the debtors. Some are a combination of the two.

During the past 39 years, I have questioned tens of thousands of debtors. Not long after I joined the Trustee panel, I began to make the observation in casual conversation and when speaking to groups, “The United States has national medical insurance; it is bankruptcy.”

That was true until the Affordable Care Act kicked into gear in 2010. Beginning immediately bankruptcy filings across the nation began to drop and have been in a steady decline since. In 2010, nationwide 1.5 million cases were filed. In 2016, 771,000 cases were filed.

In short, nationally, filings have dropped more than 50 percent in the past six years. In the Middle District of Tennessee, the decrease has been from 14,060 cases in 2010 to 9,198 in 2016, a 35 percent reduction.

During the 1980s and 1990s, I would periodically take straw surveys as I worked meeting of creditors dockets. I wanted to know what was generating the cases I was assigned. A typical survey card listed a variety of categories: medical debt, loss of job (fired or laid off), loss of job opportunity (employer closed), divorce, credit cards “gone wild,” other.

Every time I took one of my unscientific surveys, medical debt would be the cause of 50 percent to 55 percent of the cases assigned to me. The birth of a baby often pushed families into bankruptcy. Complications with birth brought on enormous debt.

No one had insurance for life-flight and it cost between $10,000 and $15,000 before the cost of medical care. Serious injuries of all varieties triggered bankruptcy as did diseases borne by parasites as well as those the source of which is not certain like Crohn’s disease and lupus. The financial impact of cancer was catastrophic.

If Congress wants to repeal the Affordable Care Act and replace it with something better, that’s fine. If it is repealed and replaced with something worse, the people of the United States will once again have national medical insurance and its name will be “bankruptcy.”

John C. McLemore is a Nashville bankruptcy attorney.

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People shopping for individual health insurance in 2018 will feel the impact of Congressional clamor for health care reform on their wallets.
Holly Fletcher/The Tennessean/Wochit

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