When people think about bankruptcy filings, they commonly think about credit card debt, loans that can no longer be paid and frivolous spending habits, among other things. In some cases, these factors may contribute to people filing for bankruptcy in Illinois, and elsewhere. However, the Huffington Post reports that medical expenses are the number one reason why people file for personal bankruptcy.
At almost any time, anyone may be touched by an unexpected injury or serious medical diagnosis. When this happens, people often require medical treatment and care, which has its costs. As any bankruptcy attorney in Lake County can attest, those costs can add up and quickly cause people to fall into debt.
Medical debt is a growing problem
There are a number of reasons why debt resulting from medical expenses can easily become overwhelming. For most people, their medical bills are not included in their regular monthly expenses. Furthermore, due to the nature of injuries and illnesses, people do not typically have the opportunity to plan for these types of bills. As any bankruptcy attorney in Lake County knows, these factors, combined with the ever-soaring costs of health care can leave many struggling to pay their medical bills.
The costs associated with health care have put a significant strain on many U.S. households. According to NerdWallet, three out of five bankruptcies in 2013 were the result of medical debt. These filings often occur after families have exhausted all other options, including refinancing their homes, maxing out their credit cards and even cutting back on preventative health care measures. This includes not taking prescribed medications to reduce medical expenses, which may cause more serious problems down the road.
Health insurance coverage and medical debt
It is a common misconception that only those who are uninsured struggle with medical debt. However, even people with health insurance coverage may incur medical bills they cannot pay. In 2013, NerdWallet estimated that 10 million insured people in the U.S. would be unable to pay their medical bills. High deductibles and out of pocket costs commonly contribute to this type of debt. If, for example, a family has an annual income of $50,000, they may have difficulties managing a $5,000 deductible or $10,000 maximum out of pocket requirement. For many, filing for bankruptcy may be the best option for eliminating this debt and achieving a fresh financial start.
Dealing with medical debt can be overwhelming, as any bankruptcy attorney in Lake County can confirm. Making the decision to file for bankruptcy, however, is a serious one that should not be taken lightly. It may be of benefit for those who are struggling with situations such as this to seek legal counsel and representation. An attorney may explain their rights and options, and may help them determine the best course of action for their circumstances.