Medical debt is a major cause of bankruptcy filings

On Behalf of | Dec 19, 2019 | Bankruptcy |

While living with some form of debt is normal in today’s society, life can get difficult when one’s debt grows and consumes most or all available funds. Consumer debt is a major issue. However, it is not the only major source of debt plaguing individuals and families across the nation. Medical debt can quickly become unbearably overwhelming, especially in matters where certain medical procedures or treatments are not covered by insurance. In many instances, getting the medical care one requires quickly turns into filing for bankruptcy to rid oneself of these financial burdens.

While the focus pertaining to financial struggles has traditionally been on credit card debt, the reality is that medical debt is the number one cause of bankruptcy filings in the United States. Residents in the U.S. pay three times more in third-party collections from medical debt when compared to debt paid to banks and credit card companies combined. It is estimated that this year alone, 51 million Americans will face encounters with collection agencies seeking to collect on medical debt.

While medical care can be costly, a recent study has discovered that a large amount of those facing medical debt were erroneously overcharged. It was also discovered that these errors are more pronounced for Medicare patients, with nearly half of all claims containing billing errors.

Facing medical debt does not just mean devising a way to pay these large bills. It also means understanding if these bills are accurate. Then, if this amount is still difficult to manage, patients dealing with overwhelming medical debt should understand their options when it comes to debt relief.

Although bankruptcy is often a process that individuals try to avoid, it can be the best solution for those dealing with major debt issues. Getting a fresh financial start can be extremely helpful especially when one is still dealing with the medical issues that generated the medical debt they are being consumed by. Thus, understanding the bankruptcy process and its benefits is important for those seeking debt relief.