Most bankruptcies occur for reasons beyond our control. As medical bills continue to soar to extraordinary heights, those who can't afford adequate health insurance have no choice but allocate their savings to vital treatments and procedures. Once these individuals run out of cash, they must resort to bankruptcy. Here's a brief look at the correlation between bankruptcy and medical expenses in the U.S.
Rising Medical Costs
In recent years, medical costs have become more daunting than ever for struggling families and individuals. According to a study by health care consulting firm Milliman Inc., healthcare costs for the average family of four exceed ,000. Those forced to file for bankruptcy often pay much more than thatespecially considering that an average night in a hospital costs nearly ,000.
According to the American Journal of Medicine, just over 62% of all bankruptcies in 2007 were filed because of insurmountable medical debtsup from 46% in 2001. After exhausting their savings, many people sell their cars, jewelry, and homes. After months of trying to keep up with medical debts, these individuals have no choice but to resort to bankruptcy.
How Bankruptcy Helps
Bankruptcy is a perfectly legal and honest way to eliminate insurmountable debtsespecially if those debts are of a chiefly medical nature. Chapter 7 bankruptcy can immediately eliminate most debts, including outstanding medical bills, but involves the seizure and sale of personal property. Chapter 13 bankruptcy can also eliminate outstanding debts, but only if the debtor adheres to a three to five-year repayment plan. Before selecting a bankruptcy option, it's always a good idea to speak with an experienced bankruptcy attorney.
Millions of Americans are just one illness away from financial ruin, despite being in general good health and obtaining the best health insurance possible. In case of medical emergencies, however, the law permits bankruptcy as a strong safety net. If your medical bills are becoming insurmountable, consider bankruptcy as a solution to your financial problems. You can contact Gary Brenner Law Offices for any further questions.