Medical debt has outpaced credit card debt and unpaid mortgages as the leading cause of filing for bankruptcy in the United States. According to the latest surveys, nearly two million people are expected to file for bankruptcy due to astronomical unpaid medical bills. Luckily, filing for bankruptcy can help ease some of the burden, and may even be the best option for those faced with overwhelming medical debt.
How Medical Debt is Handled in Bankruptcy
Health insurance is greatly helpful, but does not always cover all medical procedures. Too many consumers find themselves faced with the double-edged sword of prohibitive medical expenses and poor health – or the poor health of a relative. An estimated ten million Americans, many with full health coverage, will face unpayable medical debt this year.
Filing for bankruptcy is sometimes the only option, but the good news is that it can be a blessing in disguise, especially when it comes to easing the burden of medical expenses. Under a Chapter 7 bankruptcy, medical debt is classified as a nonpriority unsecured debt, meaning that it can be discharged in bankruptcy, freeing you from the burden of repayment. This makes bankruptcy an attractive option for someone struggling with unpayable medical bills.
Every financial case is unique, so be sure to consult with a bankruptcy expert or your bankruptcy lawyer to determine what the best course for your financial future will be. It may well be that filing for bankruptcy is the answer to your mountain of medical bills.