What happens when you owe money to a hospital for lifesaving medical care that you or a loved one needed? Hospitals aren’t cheap, and medical bills may leave you with crushing debt. Unpaid medical bills may contribute to someone filing for bankruptcy protection, even for people who have health insurance. Today’s blog from Groce & DeArmon explains medical bankruptcy facts and figures.
Related Post: Groce & DeArmon Address Bankruptcy & Medical Debt
What Is Medical Bankruptcy?
“Medical bankruptcy” isn’t a legal term. It’s a media-created term that highlights the connection between medical bills and filing for bankruptcy. The federal government makes no special differentiation between medical bills and other types of unsecured debts.
People Who File for Medical Bankruptcy
In 2019, an estimated 530,000 families turned to bankruptcy because of medical issues and bills. Roughly 65% of all personal bankruptcies were due in part to the high costs for healthcare or time out of work because of a medical issue. Medical bankruptcies are regular occurrences in America, so you’re not alone if you consider Chapter 7 bankruptcy to get relief from crushing medical debt.
Health insurance doesn’t cover enough and only offers partial protection for your finances. In 2019, Americans spent an estimated $3.8 trillion on medical care. An average household spent $5,000 a year, a rise of 101% since 1984.
The average out-of-pocket premium is $7,188 for single coverage and $20,576 for family coverage. These expenses are 740% higher compared to 1984. Even the costs just to purchase health insurance to cover your costs can be prohibitive. Medical bankruptcies aren’t just about high medical expenses, they’re also about the costs of health insurance.
How the Law Handles Medical Bills in Bankruptcies
Medical bills can be 100% discharged in Chapter 7 bankruptcy. Medical debt is one of several categories of debts that you can calculate into your total obligations. You can’t just discharge medical debts when you file for this type of bankruptcy. Other unsecured debts are discharged, too. You will also have to list your real estate and personal property debts. After you file for bankruptcy protection, you no longer owe the medical bills you accumulated prior to that filing.
Talk to Groce & DeArmon for Bankruptcy Protection
Worried about mounting medical bills? Are you continually being hounded by creditors? Chapter 7 bankruptcy protection may offer a solution. Contact Groce & DeArmon or call toll-free 1-800-640-3706 for more information or a free consultation about filing for bankruptcy.