If you are like many Americans, you probably have medical debt. You may even have an account in collections and receive multiple calls from collection agencies trying to reclaim your debt. You might feel like bankruptcy is a welcome relief to the overwhelming medical debt you have.
As insurance providers change their policies and medical costs go up, more and more people struggle with unpaid medical debt. This debt has led to many people filing bankruptcy. According to the American Journal of Public Health, around 60% of people cite medical debt as a main reason for declaring bankruptcy.
The cost of medical care keeps going up
When a person needs life-saving care, cost is often the last thing he or she thinks about. But the increase in charges of a hospital stay can leave many people with high bills afterwards. And insurance has strict rules on which doctor or hospital is in network or out of network. Patients may incur even higher charges just by going to a hospital or doctor not covered by their insurance.
Many people are uninsured or underinsured
In addition to the high cost of care, insurance costs have risen. This leaves many who cannot afford it uninsured. Or if they do buy it, they can only afford the relatively cheaper high-deductible plans. These do not pay for medical services until the patient pays thousands of dollars in deductibles.
Bankruptcy can discharge medical debt
If you find yourself with high medical debt that you can’t pay down, you may be able to find relief in bankruptcy. In Georgia, you can eliminate medical debt by filing for a Chapter 7 bankruptcy. This resets your finances and gives you a chance to start over.
As the cost of medical care increases, bankruptcy may be an option for those with unmanageable debt.