Medical bankruptcies continue to plague Americans

Here in Atlanta, we are all well-aware of the exorbitant costs of health care. A visit to the doctor for a minor ailment can result in a bill for hundreds of dollars — even for those who have insurance. A major injury or illness can set a person back tens of thousands of dollars, making it impossible to make ends meet.

Today, medical bankruptcy is the most common reason that people file for bankruptcy. What makes this fact particularly frightening is that almost 80 percent of people who file for bankruptcy because of medical debt have insurance.

When you are facing overwhelming debt because of medical expenses, there are a few things to consider before choosing whether to file for bankruptcy. First, it is a good idea to work directly with the hospital to see if it is willing to negotiate the cost or work out a payment plan. If you are still considering bankruptcy at this point, it is good to carefully consider both Chapter 7 and Chapter 13 bankruptcy to determine which makes more sense for your situation.

Next, it is a good idea to be strategic about when you file. If you are in over your head but are only halfway through your expensive treatments, it may be worth waiting a while so you don’t fall back into serious debt again. However, waiting too long can be problematic as well. If you are contemplating filing for bankruptcy because of medical debt, talking to an attorney about your options is a good place to start.

Source: Fox Business, “Medical Bankruptcies are Still a Problem, Here’s What to Expect,” Donna Fuscaldo, Feb. 18, 2014