Are medical bills a reason to file for bankruptcy?
Who do you think files for bankruptcy? Why do you think people file bankruptcy? These questions may seem easy to answer on the surface, however if we look closer we can see that there is no reason why someone would file for bankruptcy. Let’s take a look at an average family who lives within their means and does “everything right.” You certainly wouldn’t be someone who would need protection from bankruptcy laws, would you?
First of all, we would expect them to have health insurance. With health insurance, your medical bill is covered, right? That would depend on the type of plan they have and the type of medical problem they face. What is your deductible? What is the copayment percentage? With most plans, the copayment percentage is 80 to 20. This means that the insurance pays 80% of the bill after the deductible is understood and the family pays 20%. That works well for outpatient office visits and minor surgeries. However, if you are unlucky enough to have a major health problem, your 20% of a $ 100,000.00 bill would be $ 20,000.00. This would be in addition to the deductible. Now, can this family who normally save for a modest vacation pay this kind of bill? What if the person with the biggest health problem can no longer work? This is when it may be necessary to consult a bankruptcy attorney. Studies have found that 62% of all bankruptcies involved medical bills and disease-related problems. Of the 62% of taxpayers, 78% had health insurance. Of these people, the majority were well-educated middle-class families. Some studies show that most families have a major health problem that separates them from filing for bankruptcy.
With the fact that many families are a major health concern far from bankruptcy, anyone can find themselves in this situation. Another issue that comes into play is that most healthcare facilities have their own collection agencies or services. Your huge healthcare bill is treated like an overdue credit card payment or a late mortgage payment. They use the same tactics as other creditors when it comes to collecting a debt. They call and harass the person. They file a court action that can include garnishment. Once the foreclosure begins, you may fall behind on your mortgage, car loans, and even have trouble buying gas or food. This is the time to consider bankruptcy and see if it can help you. Since bankruptcy law is complex, you need a good bankruptcy attorney to help you sort through your options. Don’t let the stereotype of who files for bankruptcy keep you from getting the protection you deserve when illness and medical bills threaten your financial future.