Medical debt can pile up quickly and many people in Miami may have had to spend much out of their own pocket over the last year. Even those with health insurance may find that due to co-pays, high deductibles and uncovered expense that they have spent a significant amount over the last year in medical bills. For some, medical debt piled up since 2020 has led them to consider bankruptcy as a viable means for extinguishing this debt and moving forward on fresh financial footing.
How much were Americans spending on medical care in 2020?
According to Credit Karma, medical debt among members saw a 6.5% uptick from the end of May 2020 to the end of March 2021 — a total of $2.8 billion. Those with past due medical debt went up by almost 9% during that time period, from 19.6 million to 21.4 million.
A LendingTree survey published in April 2021 found that 60% of those in the U.S. polled reported facing medical debt, and of these, 53% reported that they owed more than $5,000. Moreover, 72% of those surveyed reported that their medical debt was keeping them from achieving financial milestones such as purchasing a home or starting a family.
Economic issues lead to increase in medical debt
According to one study, approximately 7.7 million workers in the U.S. lost their employment provided health insurance by June 2020. Not only did this affect the workers, but also 6.9 million of the workers’ dependents as well. Due to this loss of coverage, one expert cited this reason for the increase in medical debt. Moreover, those who were laid off, if they could afford to do so, took on health insurance with a high deductible, meaning they were paying more out-of-pocket for medical care. And, if a person was laid off, there was simply less disposable income going around, making any emergency situation more difficult to deal with financially.
Learn more about filing for bankruptcy in Florida
For those dealing with overwhelming medical debt, filing for bankruptcy may be one option worth considering. Chapter 7 bankruptcy, also referred to as a “liquidation bankruptcy,” works by having a person’s non-exempt assets sold, and the proceeds used to pay their creditors. At the end of the Chapter 7 bankruptcy process, many of a debtor’s remaining debts may be extinguished. This post is for educational purposes only and does not contain legal advice. Our firm’s webpage on Chapter 7 bankruptcy may be a good resource for those who want to learn more about this topic.