Has Medical Debt Become the Most Common Reason for Bankruptcy?

Posted on April 6, 2015 at 12:00pm by

In the last several weeks, we have written about the uninsured facing unpayable medical bills, but many remain unaware that it can happen to people with health insurance.

There have been numerous cases where people have experienced medical emergencies, only to be taken to a hospital that is out-of-network, meaning not covered by their insurance policies. Accident survivors are looking at tens of thousands of dollars in medical bills if they are taken to a hospital not covered by their insurance policy.

One woman in Wisconsin found out the hard way that even with insurance, she could face financial ruin. After suffering from a condition that caused cardiac arrest, emergency responders sent her to a hospital out of her insurance network. Upon discharge from hospital, she was slammed with more than $50,000 in medical bills. To make matters even more frustrating for the poor woman, it turns that only three blocks away, there was another hospital covered by her insurance!

With scenarios such as the one mentioned above occurring on a regular basis, it is no surprise that medical debt has become the number one cause of bankruptcy in the United States, surpassing mortgages and credit cards. According to NerdWallet, a price comparison website that compiled data from the U.S. Census and the Centers for Disease Control, rising medical costs will push 1.7 million households into bankruptcy this year.

Should I File for Bankruptcy to Get Rid of Medical Debt?

By filing for bankruptcy, people who have had their finances destroyed by medical debt can avoid the consequences of owing thousands of dollars. The consequences of not paying medical debt include lawsuits and wage garnishments, harassment from collection agencies and an inability to secure lines of credit.

We encourage our readers to visit our YouTube page to learn more about declaring Chapter 13 bankruptcy and other options for discharging medical debt.

The Sader Law FirmKansas City Bankruptcy Attorneys