*UPDATE*BANKRUPTCY QUESTIONS ANSWERED
*UPDATE* MEDICAL BANKRUPTCY INFORMATION

CHAPTER 7 |  CHAPTER 7 HEARING | CHAPTER 13 | CHAPTER 13 HEARING

Tough Times and Health Problems A Recipe for Bankruptcy

A recent study shows that 62.1% of personal bankruptcy cases in 2007 were linked to medical expenses. Given our countries financial crisis it’s safe to say that this is an even bigger problem today in 2009.  In this study released by Harvard professor Elizabeth Warren it showed that most medical debtors were middle class families that owned homes, were employed, and 75% had health insurance.

So what does this study reveal about our current health care situation?  One serious illness can cause unaffordable medical expenses or a decrease in or lack of income which results in bankruptcy. Most families have nothing to fall back on if they become ill and lose their job, which consequently causes the loss of health insurance. 

Most all bankruptcy debtors had some medical debt, but about half of the debtors, according to the study had mostly medical debt.  While this study only encompasses a handful of bankruptcies, 2,314 to be exact, it does make sense.  In 2005 laws were passed to make bankruptcy a bit harder to obtain, yet the numbers increased after a few years. 
So what are bankruptcy lawyers saying about this study, a few are totally disagreeing with the study saying it is propaganda to back up a government run national health care plan, but most agree that almost all bankruptcies have some medical debt attached. 

Health care in the United States is like a game, you can get a plan that seems to cover the needs you have and everything is fine, but given a change in those needs and your finances can be devastated.  It is good to know that bankruptcy is an option, but this is really a problem that must be addressed.  It seems like a crap shoot when choosing a health care plan and most don’t get to choose, they get what their employer offers.  Every plan has different co-payments, different prescription plans and different deductibles it is impossible to feel confident that you will not fall into this terrible predicament.

People think they are doing everything right, they go to college, get a good job, buy a house, have a family, and get what they think is good insurance but then it falls short, very short.  So what do they do?  They use their credit cards to pay bills, take a second mortgage on their house to pay outstanding medical bills and then find themselves in a unable to make all the payments, so they have to file for bankruptcy.  Because they have paid the medical bills they are not outstanding in many cases but they were the cause of the credit card bills and other bills that are outstanding. 

Clearly bankruptcy isn’t limited to undereducated people who can’t get or keep a job.  It touches the middle class much more than most people think.  Until something is done about our health care situation, people will continue to use bankruptcy to help with their financial problems caused by an illness.  At least that is something.

If your financial situation has been affected by an illness and you are considering bankruptcy, you are not alone.  For information about filing for bankruptcy you call us at 706-232-2222