Medical Bankruptcy
Healthcare costs can be crippling. In 2022, research shined the light on just how devastating medical debt can be, noting that two-thirds of all bankruptcies involved medical debt. That’s about 530,000 bankruptcy filings annually, all situations impacting normal, everyday families who just happened to have to deal with a catastrophic medical issue. And even those who don’t look toward bankruptcy for solutions to medical debt often suffer crushing medical bills, with over 40 percent of Americans reporting that medical debt is a significant problem they face.
Why it’s so Common
Experts say medical debt is unmanageable in the United States because the cost of care is so much higher in the US than in other parts of the world. When a serious medical issue hits, many people are underinsured leaving them no choice but to file for Chapter 7 bankruptcy. Even those with insurance often find coverage falls short in an emergency. Giving all of these problems a troubling hue is the fact that the wealth gap and documented disparities in outcomes related to healthcare. While about 17 percent of white Americans are suffering from serious medical debt, that number is 27 percent for Blacks. Studies tie the difference to unequal health services and an increasingly wide wealth gap. Whoever you are, whether it’s a chronic issue that requires ongoing care, or a sudden emergency, the costs can turn life upside down. Some advice for every American worried about the possibility of ending up the unmanageable medical debt includes:
- Compare insurance plans and pick the one that fits your budget before an emergency hits.
- When you get medical bills, review them with care, looking for overcharges, duplications, or other errors. Always ask for an itemized bill.
- When bills arrive, negotiate with both the insurer and the provider. Oftentimes hardship programs can help, or institutions are willing to provide discounts.
- Look for help from foundations, government programs, or charities. There are resources out there that most people don’t know about.
Consequences of Medical Bankruptcy
Although it gets collectors off your back, medical bankruptcy comes at a cost, including:
- It cleans you out financially, depleting savings and assets in many cases.
- It damages your credit score for years, impacting financial opportunities now and later.
- It can make people feel like failures through no fault of their own.
Filing for Bankruptcy
The experienced, compassionate Miami bankruptcy attorneys at The Law Office of Julia Kefalinos understand the challenges of medical issues and are available to assist with your bankruptcy concerns going forward. Whether you decide on a Chapter 7 or a Chapter 11, we can answer your questions and take care of the legal issues you are facing. To discuss your circumstances, schedule a confidential consultation in our Miami office today.
Source:
businessinsider.com/personal-finance/credit-score/medical-bankruptcies
