Medical Bankruptcy

Seeing a doctor can be a mandatory decision. We know that when we must go to the doctor, it can mean bills with big numbers. Although experts do not agree on the percentages, a sizable portion of debt and bankruptcy cases stem from a person’s or family’s inability to pay their medical bills.

Some experts say that medical expenses play a significant role in more than half of the nation’s bankruptcies. Others put the number lower, at around 17 percent. Either way, several studies have found that injury or illness was listed as a cause in about one-quarter of a sample of bankruptcy cases. Another study found that uninsured households are 28 times as likely to file for bankruptcy as other households.  While not always singing in harmony, these studies point to the critical relationship among medical expenses, debt, and bankruptcy.  

While your doctor bills can run high, sometimes that cost is not the only factor leading to a medical bankruptcy. Sometimes the problem comes from other factors surrounding the condition. For instance, debt can take shape from the income lost from the time needed to take a loved one to medical treatments or to care for someone else directly. In 13.3 percent of the medical bankruptcy cases, the debt burden was taken on to care for a sick child, which can make this sort of bankruptcy especially crushing emotionally.

There are some things that you can do to try to ease the burden of medical expenses. Tips for those who need to pay off medical debt include:

• Try to work out a plan with smaller monthly payments.
• Seek help from a charity, churches and other civic-minded organizations.
• Apply for federal Medicaid benefits, which go to the economically disadvantaged.
• Make payments, even a small amount, on each bill as a sign of good faith.
• Never transfer medical debt to credit cards. It could affect Medicaid eligibility and the interest rate will increase your debt.

It is unfortunate that too many families find themselves in debt this way. But it is important to remember that there are ways out of debt and to a better future.