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Company aims to help forgive medical debt

Kentucky residents who are struggling with medical debt may have an ally in Better. A startup that aims to help people with out-of-network medical debt, the company has pledged 100 percent of its revenues towards helping those with large debts. The pledge will last until the fall, and Better is able to make such a pledge because it buys the debt at a fraction of its actual cost.

The company raised $1.1 billion from organizations such as Initialized Capital and Designer Fund. It aims to secure $16 million in medical debt from its revenues, but the amount it pays for that debt is likely only going to be a fraction of that total. If that target is reached, it would best the $15 million forgiven by John Oliver in 2016. Better makes money by charging users 10 percent of whatever money they are able to get back from their insurance companies.

In 2016, Americans had $3.35 trillion in medical debt, and more than 40 percent of them said that they were unable to pay those costs, even for those who have health care insurance. A study done by Kaiser/New York Times found that medical debt impacts roughly 20 percent of the American population. It is also one of the most common causes for personal bankruptcy in the United States.

In most cases, medical debt can be discharged in Chapter 7 bankruptcy or reorganized in Chapter 13 bankruptcy. This may make the financial burden easier. An attorney can describe the eligibility requirements under each chapter and the process of filing.

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