Bankruptcy And Medical Debt

Medical debt is number one reason for people declaring bankruptcy.   Most people think that excessive spending via credit cards or other lavish purchases like large homes or fancy cars are to blame but really medical debt plays a large part.  You may think that you are exempt from the possibility of having to file bankruptcy because of medical debt but many people in this situation thought it would never happen to them either.

Didn't They Have Health Insurance?

People always like to think that bankruptcy is not in their future so they try to separate themselves from those declaring bankruptcy.  In the case of people declaring bankruptcy because of medical debt, many like to think that these are those unfortunate individuals who do not have health insurance.  This is not the case.  At least 75% of the people declaring bankruptcy because of medical debt actually have health insurance.  This health insurance just had limitations which lead to large amounts of medical debt.  These limitations included things like copayments, deductibles, and just other medical expenses that were not covered by their health insurance plans.  This was often the case with illnesses that lasted for long periods of time and some people became too sick to work and lost their health insurance as a result. 

Bankruptcy As A Last Resort

Bankruptcy is not your only option for dealing with medical debt.  In some instances you will be able to go to court and have your income and other property declared exempt so that your creditors will not be able to take them from you.  If you do end up filing for bankruptcy then you should know that with some types you cannot file again for 6 years which means that if you incur debt during this period you will not have this route of financial recourse.

How An Attorney Can Help

If you are to the point where you are considering filing for bankruptcy as a result of medical debt then you want to get an attorney who can help you understand the process of filing for bankruptcy and what bankruptcy will mean for your financial future.  Between the paperwork and everything you need to know about what bankruptcy means for your taxes, an attorney can make sure that you don't proceed without knowing all the important details.  You're not the only one filing for bankruptcy because of medical debt.  Just make sure that you're one of those filing for the right reasons and in the right way.