Mounting medical costs push thousands into bankruptcy

| Jul 6, 2020 | Personal Bankruptcy |

The pneumonia had taken its toll on Mary Cross. It was 2013, and the Detroit woman was struggling enough that she was admitted to the hospital. She underwent lung surgery as a result, and in the course of her treatment was diagnosed with an inflammatory disease known as sarcoidosis. Her medical bills soared. Not knowing how to crawl out from under the debt, she turned to bankruptcy.

Mary Cross’ story is not just her own. It is one experienced by hundreds of thousands of Americans every single year.

Medical issues are a common cause of bankruptcies

Even with insurance, medical bills can pile up. Even on a small scale, you have likely experienced this – a simple office visit or prescription is supposed to cost one thing, but ends up being much more expensive. When this occurs repeatedly or on a large scale, it can wreak havoc on a person’s finances.

According to a report from CNBC, two-thirds of all bankruptcies filed in the U.S. are tied at least partially to medical issues. That amounts to more than half a million bankruptcy cases every year. This can mean one of two things: either extraordinarily high bills, or significant lost wages that resulted from the ailment.

As you can see, this situation happens quite frequently, even to individuals who do everything right. It is not a reflection of someone’s character or success.

Medical debts can often be discharged

For many individuals, the end goal of bankruptcy is debt relief. This comes through something called a discharge – a court order that essentially wipes away a person’s liability in regard to specific debts. That means a creditor can no longer come after that person, and the matter is considered done.

Not all debts can be discharged through personal bankruptcy. However, in most cases, medical bills can be eliminated. This means, if done correctly, a personal bankruptcy has the potential to wipe away mounting medical debts and lift the heavy burden from your shoulders.