The growth of medical bankruptcies in the U.S.
It is always an interesting question of scruples when you consider how much debt a person will go into to maintain their health. Indeed, good health, or at least the benefit of it, should be priceless, but the number of bankruptcies caused by medical expenses cannot be ignored. This is an important topic to broach considering the number of uninsured Americans after the passage of the controversial Affordable Care Act.
According to some estimates, the number of Americans without health insurance has fallen by nearly 15 million. However, the accessibility to health insurance does not guarantee protection from crushing medical debt. This is because medical health care plans require hefty out-of-pocket payments for medical treatments; especially when people are treated for long, life-threatening illnesses such as cancer, lupus and HIV.
If you are considering bankruptcy because of medical debts, are certainly not alone. There are countless stories of people who had relatively good health insurance, but fell into debt dealing with out-of-pocket expenses; but for various reasons, fell into financial straits. A recent study conducted by the New York Times and the Kaiser Foundation showed that 20 percent of people under the age of 65 had problems paying medical expenses last year. With the United States being the most expensive country in the world to get sick, it would not be surprising to see this number increase given the overriding trend of having patients bear more of the costs of medical treatment.
In fact, you are likely among a contingent seeking relief from oppressive costs and fees that has been growing for years as health care costs have steadily increased. According to a study on bankruptcy filings, more than half of all bankruptcies filed were due to overwhelming medical expenses.
While creditors can seek judgments to collect on unpaid medical expenses, those toiling in debt can take solace in the fact that medical debt is considered unsecured debt Under the U.S. Bankruptcy Code. As such, medical debts can be discharged in Chapter 7 or Chapter 13 bankruptcy in the same fashion as credit card debt, personal loans and other forms of service debt.
Depending on your overall circumstances, you may qualify for Chapter 7 (called liquidation bankruptcy) or Chapter 13 (wage earner’s bankruptcy). Through a proper bankruptcy petition, you may gain court approval to obtain a discharge, thereby eliminating your legal obligation to pay your debts.
If you have additional questions about discharging medical debt, an experienced bankruptcy attorney can advise you.