A recent analysis by a credit-counseling agency has determined that an increasing number of consumers filing for bankruptcy are doing so because of medical debt. In fact, medical debt triggered about 20 percent of all consumer bankruptcies filed over the last two years - an increase of 7 to 8 percent from the prior two-year period.
A spokesperson for the credit-counseling agency that reported these findings indicated that the increase is simply a result of our tough economic times.
Specifically, high unemployment means many previously employed workers no longer have health insurance that covers their rather lofty medical bills, the spokesperson explained.
In addition, some of those who still have health insurance are turning to credit cards to help cover their high insurance premiums. Others are buying health insurance policies that offer lower monthly premiums in exchange for higher deductibles.
While those who fall into this latter category can afford these lower insurance premiums, they may be ultimately forced to file for bankruptcy in the event they incur rather large uninsured medical costs and high deductibles.
According to the spokesperson for the credit-counseling agency, a sense of gratitude and obligation forces many people into trying to pay their medical bills on time. However, for others, the threat of providers simply refusing to give ongoing treatment is enough.
"If they don't pay, services won't be provided," she said.
As a result, people are forced to get out their credit cards to provide care for their loved ones.
The agency analysis acknowledges that consumers have few options when it comes to paying medical bills. Some individuals may qualify for a debt management plan that reduces monthly payments to a manageable amount. However, for most, bankruptcy is a welcome solution that can eliminate help medical debt and provide a fresh financial start.
If you would like to learn more about Chapter 7 bankruptcy, Chapter 13 bankruptcy or eliminating medical debt, take the time to speak with an experienced legal or financial professional.
The following post is for informational purposes only and is not to be construed as legal advice.
The New York Times "Medical debt cited more often in bankruptcies" Aug. 18, 2011
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