If you are overwhelmed with medical debt and considering Chapter 7 bankruptcy, you are not alone. A 2013 study determined that medical bills are the number one reason people file for bankruptcy. Coming in second and third are credit card debt and the inability to pay a mortgage.
Even when it looks like the reason for bankruptcy is credit card debt, many people have maxed out their cards by using them to pay their medical bills. Due to the high interest charged by credit card companies, people get buried even deeper in debt. They look to the bankruptcy court for relief and the promised fresh start.
Insured and Uninsured Both Experience Out-of-Control Medical Bills
Some think that if you have health insurance, you should not incur medical bills leading to bankruptcy. In fact, it is not just the uninsured that have hospital and doctor bills so high they cannot pay them. Many insurance policies require hefty out-of-pocket payments before coverage begins.
When a family, earning an average of $50,000 a year, is faced with paying thousands of dollars every year for medical care before their insurance pays a penny, the medical bills can be exactly what drives them to bankruptcy court. A Chapter 7 discharge of debt can provide them relief.
Influence of the Affordable Care Act (ACA)
The ACA, commonly referred to as Obamacare, will provide more Americans healthcare coverage. It is not the answer to preventing medical debt bankruptcy filings. Insurers may still offer policies with high deductibles requiring hefty out-of-pocket payments before coverage clicks in.
If you are drowning in medical bills, or overwhelming credit card debt from paying your medical and doctor bills, call our bankruptcy lawyers for a consultation. Chapter 7 or Chapter 13 Bankruptcy may provide you the solution you need.