With today’s economic conditions, serious injuries or illnesses can cause serious financial upheaval. Prolonged ailments requiring long recovery periods can deprive people of their ability to earn a living. Many working Americans have health insurance through their employment, but more often than not, such coverage does not cover mounting expenses caused by serious and prolonged illnesses.
Real Stories about Medical Expenses
It is not uncommon for people with chronic medical conditions to struggle financially. This problem can be exacerbated when insurers refuse to pay expenses. However, when medical expenses become too much to bear, bankruptcy may provide a remedy.
Indeed, most stories about medical expenses in mainstream media today focus on the battle on chronic pain, and how drug overdoses from prescription drugs kill more Americans each year than many terminal diseases. But what is not commonly discussed are the costs for medications and other medical expenses, many of which are vital to a patient’s survival, but can lead to crippling debt.
Medical Debt under the U.S. Bankruptcy Code
Medical debts can be discharged in Chapter 7 or Chapter 13 bankruptcy in the same fashion as credit card debt and personal loans. Depending on your overall circumstances, you may qualify for Chapter 7 (called liquidation bankruptcy) or Chapter 13 (wage earner’s bankruptcy). Upon proper application, you may seek court approval to obtain a discharge, thereby eliminating your legal obligation to pay that debt.
If you are considering bankruptcy because of medical debts, you are among a growing contingent seeking relief from oppressive costs and fees. According to a study on bankruptcy filings, more than 60 percent of all bankruptcies filed were due to medical debt. Debtors seeking bankruptcy protection averaged $17,943 in medical expenses and 75 percent actually had health insurance.
Medical Debt in Today’s Economy
It is debatable whether medical costs, by themselves, are actually causing more people to file bankruptcy. There are no concrete studies on how such costs affect payment of other family expenses, such as mortgages, utilities and credit card debt. It should be noted, however, that the healthcare industry has become so inflexible in negotiating debt settlements that lawsuits have become the new normal. With more than 59 million uninsured Americans, it is likely that “medical” bankruptcies will continue.
If you or a loved one is burdened with medical debt, an experienced attorney can provide the guidance and information necessary to make an informed decision about bankruptcy.