Medical debt is one of the top reasons for bankruptcy, and it shows up in most cases. It may not always be the primary cause or the only cause. Someone may have medical bills, student loans, credit card bills and a home mortgage, for example.
But medical expenses are very common and often contribute to the overwhelming financial hardship that consumers feel. This may lead them to use Chapter 13 or Chapter 7 bankruptcy. Below are two reasons why medical debt shows up so often.
1. Medical care is very expensive
First and foremost, the sheer expense of medical care in the United States can be extravagant. Procedures could cost tens of thousands or hundreds of thousands of dollars.
At the same time, the United States does not have any type of universal healthcare. This means that those who get injured are dependent on their health insurance, which may not cover all of their costs – especially if they determine after the fact that some of those were “out of network” costs.
2. People feel they have no choice
Another reason is that people who are facing a medical emergency often don’t think they have a choice. With some types of debt, the borrower is making a conscious decision to take on debt that later becomes unaffordable. An example of this could be someone who gets a car loan and then loses their job and can no longer afford the loan.
But with medical bills, people are just going to get the care that they need for themselves or a close family member. They don’t view this as a choice the same way it is a choice to buy a car – but they could end up with even more debt as a result.
If you find yourself in this position, be sure you understand how bankruptcy may be beneficial.
