Medical Debt in Bankruptcy

Many Americans struggle with high levels of medical debt. Medical debt and costly medical bills are one of the top reasons for filing for bankruptcy in the United States. Approximately 60 percent of personal bankruptcies are caused by unmanageable medical bills. Unfortunately, millions of people will face financial hardship over the costs of accessing care each year.

Making Matters Worse

Extraordinary medical bills frequently arrive unexpectedly. Research shows that most Americans are unaware of their medical bills until they are overdue. Furthermore, a majority of people are unaware of their medical costs at the time of service; and without the ability to refuse care. With limited options for affordable treatment, many people have no choice but to receive the care and be held liable for the costs.

Another factor contributing to the medical debt crisis is disparity among individuals. Low-income individuals are also more likely to file for bankruptcy due to medical debt. According to the Consumer Financial Protection Bureau (CFPB), low-income patients receive medical bills at a higher rate from hospitals, doctors, and other healthcare providers. Low-income individuals may also be more likely to relocate often, leaving medical bills undelivered to the correct address.

Help On the Horizon

Fortunately, medical debt is among the easier debts to eliminate through bankruptcy. It is easier in many cases to resolve medical debts in bankruptcy as they are usually unsecured debts, meaning they are not tied to any assets or property as collateral. This makes it easier to resolve the debt in bankruptcy and reduces the risks of liquidation or repossession.

For most people it makes sense to look at filing bankruptcy for medical bills once they become unmanageable, especially when it becomes impossible to meet basic needs such as food, shelter, and clothing.

If you are experiencing problems with medical debt, contact a Modesto bankruptcy lawyer today.