Bankruptcy a Possible Cure for Medical Debt Ailments

More people in the U.S. are struggling with medical bills and are considering filing bankruptcy as an option to deal with their debt.

2012-03-01

March 01, 2012 (Press-News.org) Bankruptcy a Possible Cure for Medical Debt Ailments

With unemployment remaining high and the country in a recession, many people have found that they no longer have health insurance or can no longer afford to pay for health insurance. As a result, when they do need to seek medical care they not only have to deal with whatever ailment for which they are seeking care, they also have to face huge medical costs. Recent statistics show that medical debt is rising in the U.S. and many are considering bankruptcy as an option for dealing with medical bills.

Medical Debt on the Rise

An increasing number of people in the U.S. are dealing with medical debt. Data from the Commonwealth Fund shows that 44 million people owe money on medical bills -- a stark increase from the 8 million people with outstanding medical debt in 2005. The Center for Studying Health System Change released a report in December 2011 revealing that 20 percent of people in the U.S. were struggling to pay their medical bills, and 25 percent of those having trouble paying were considering filing bankruptcy.

According to CredAbility, a non-profit credit counseling agency, 20 percent of the people seeking pre-bankruptcy filing credit counseling in 2010 and 2011 reported that medical debt was the cause of their bankruptcy. In contrast, only 12 percent of people seeking credit counseling in 2008 cited medical bills as a reason for bankruptcy.

Bankruptcy as a Solution

One of the major benefits to filing bankruptcy is the protection that it offers filers through the automatic stay on collection actions. Once a person files a bankruptcy petition, creditors can no longer try to collect on debt -- meaning that debtors no longer face harassing phone calls and letters demanding payment.

Most medical bills are considered unsecured debt, and are dischargeable in bankruptcy. Once a person receives a bankruptcy discharge, he or she will no longer be responsible for paying the discharged debts.

Consult an Attorney

Filing bankruptcy is a big decision and it may not be the proper solution for everyone who is having trouble paying medical bills. Those struggling with medical debts should consult an experienced attorney who can discuss their situations with them and advise them of their options.

Article provided by Charles R. Nettles, Attorney at Law
Visit us at http://www.cnbankruptcylaw.com

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