THIS IS AN ADVERTISEMENT

Report: Medical Debt is No. 1 Cause of Louisville Bankruptcies

Our Louisville Chapter 7 bankruptcy attorneys have long known that grappling with medical bills after a serious illness is one of the main reasons people came to us for help.
hope1.jpg
Now, according to a new report, it’s apparently the No. 1 reason in the U.S. why people are seeking Chapter 7 bankruptcy relief.

NerdWallet Health, a non-profit research group dedicated to helping patients make informed decisions, conducted an analysis of statistics released from the U.S. Centers for Disease Control and Prevention, cross-referenced with the latest U.S.census data as well as information from a widely-cited Harvard study on bankruptcy and the numbers released by U.S. bankruptcy courts.

What they found was that medical bills were the root cause of slightly more than 57 percent of all Chapter 7 bankruptcies – more than any other kind of debt. In fact, it’s estimated that medical debt will account for 1.7 million bankruptcies just this year alone.

Sadly, even having health insurance didn’t shield people from the possibility of financial troubles due to sky-high medical costs. This year, researchers concluded that some 35 million adult Americans between the ages of 19 and 64 will be contacted by collections agencies regarding unpaid medical bills.

Of those, about 15 million will end up paying all of their savings to cover the cost of those medical bills.

More than 11 million are going to take on more credit card debt to be able to pay those bills. And almost 10 million will be so buried in medical debt that they won’t be able to cover the basic life necessities, such as food, rent and heat.

It’s not just adults who are affected by this, either. We’re talking about 16 million children who are living in homes where parents are guardians are grappling with health care debt.

Of those who were reported to be severely struggling, more than a third had health care insurance.

In an effort to save costs, researchers estimate that some 25 million Americans won’t take their prescription drugs as indicated. They’ll choose to delay refills or skip doses in hopes of reducing the overall expenses. Of course, failing to follow a doctor’s orders only results in further medical problems, which could result in a reduction of work hours or even a lost job – meaning this ends up becoming a vicious cycle that only repeats itself.

To put all this a different way, about 20 percent of all American adults are having a hard time paying their health care bills and three-fifths of all bankruptcies are ultimately filed for this reason.

Some may be quick to blame poor spending and saving habits when it comes to those who must file for bankruptcy. But the reality of it is, few of us plan for cancer or a sick child or a dying spouse. Those of us who can afford health insurance pay our monthly premium and hope for the best.

But that’s often not enough. Falling victim to illness can be absolutely financially devastating for a family. Ambulatory expenses, emergency room costs, intensive care payments, money for medication and therapy and follow-up visits and subsequent treatments – it all adds up.

The reason so many people turn to bankruptcy is that it offers a fresh start. For many, there is no worldly way whatsoever that they would be able to pay otherwise. In other cases, even when payments are technically possible, people come to the conclusion that they can no longer be held hostage.


If you need to speak to a Kentucky bankruptcy attorney or Louisville foreclosure defense firm, contact the Schwartz Bankruptcy Law Center at 866-270-4495 for a free and confidential consultation to discuss your rights.

Additional Resources:
Biggest cause of personal bankruptcy: Medical bills, June 25, 2013, By Dan Mangan, CNBC
More Blog Entries:
Louisville Bankruptcy Lawyers – Borrowing Money Before Filing, May 29, 2013, Louisville Chapter 7 Bankruptcy Lawyer Blog

Contact Information