There’s a stigma associated with filing for bankruptcy, with many people assuming that those filing have simply mismanaged their finances or used their credit cards too freely. However, bankruptcy is a solution that most people avoid for as long as possible, and only enter into it because they have no other choice.
The fact that they are being faced with bankruptcy is not necessarily because they don’t know how to handle their money. Rather, it is often because they have been dealt a difficult hand of cards. According to CNBC, an increasing number of Americans are filing for bankruptcy because of medical debt.
Medical debt and bankruptcy: by the numbers
Each year, it seems that more Americans are citing medical debt and health care costs as the primary reason for their bankruptcy filing. These statistics highlight how far-reaching this issue has become:
- 66.5 percent of all bankruptcy cases were related to medical issues in some way. This could include the cost of medical bills as well as lost wages associated with time off from work to seek treatment for medical issues.
- 530,000 American families file bankruptcy because their medical debt is unmanageable.
The research revealed that medical debt and health care costs are the most common reasons for bankruptcy in the United States. About 44 percent of people surveyed filed for bankruptcy because they had been spending excessively, and 28 percent had to file for bankruptcy because they had been providing financial assistance to relatives or friends.
How much medical debt can you discharge through Chapter 7?
Those who are being faced with bankruptcy because of medical debt often wonder how much of their debt will be alleviated after the bankruptcy process is complete. Before answering this question, those who are suffering from excessive medical debt first have to understand that there is no difference between filing for bankruptcy because of medical debt and filing for bankruptcy for any other reason, such as excessive spending, student loans or divorce. Those who seek bankruptcy to eliminate medical debt will need to consider either Chapter 7 or Chapter 11 bankruptcy, just as they would under any other circumstances.
In most cases, most or all of your medical debt will be relieved during the bankruptcy process. Outstanding medical bills can be discharged under bankruptcy law, but you will want to work with an attorney to discuss the specifics of your case. Generally, the only types of debt that are difficult to discharge under bankruptcy law are student loan debt, alimony, child support and unpaid taxes.
Facing crippling medical bills?
Whether you have suffered a serious injury that resulted in an unexpected surgery, or your child is receiving long-term treatment for a serious illness, you may find yourself with medical bills that are higher than you can handle. It’s a situation that can feel isolating, but you are not alone. If the time has come to file for bankruptcy to relieve yourself of medical debt, then the first call you need to make is to a qualified bankruptcy attorney who can help you navigate through this situation.
Our compassionate and empathetic team is dedicated to providing you with the legal services that you both need and deserve. Allow us to help you get out of debt and begin with a fresh start again. Contact us today to set up a complimentary consultation appointment.