Bankruptcy Law, Debt Relief, Medical Debt

How the Insured Fall into Medical Bankruptcy

medical bills, medical debt

There was a time when having health insurance was enough to assure someone that his or her medical expenses would be adequately covered and that he or she would not fall into debt due to one major medical crisis. However, today’s high deductible insurance plans and skyrocketing medical costs have made it impossible to stay out of medical debt. It is for this reason that so many American consumers are falling into what is called “medical bankruptcy” or bankruptcy due to medical debt.

According to a study published by the American Journal of Public Health, 530,000 bankruptcies are filed annually due to medical debt. Even with coverage offered through the Affordable Care Act, consumers are still struggling to afford their medical bills. A lot of this has to do with the insurance coverage options and healthcare plans offered.

The coverage available to most Americans is not enough to pay for even the most basic medical expenses, let alone unexpected expenses that come along with a major illness or injury.  It comes as no surprise that both political parties see insurance coverage as a major issue in the upcoming presidential election.

It has been reported that approximately 60 percent of all filers are pursuing a bankruptcy because of medical debt. In fact, medical debt is the main cause of collection calls, and these collection cases include people with insurance as well as those without insurance. It has been reported that one in every six Americans has at least one unpaid medical bill on his or her credit report, which amounts to billions of debt nationwide.

Many Americans find themselves stuck with high premiums to pay for their insurance, which not only reduces the size of their paychecks but also puts them in a difficult position to pay down large medical bills as soon as they are received. Providers are often willing to work out payment plans for patients who are not able to pay off the amount owed, but one problem with this is one medical procedure or hospital stay can result in multiple medical bills from various providers.

How is Medical Debt Handled in Bankruptcy?

In bankruptcy, medical debt is treated the same as credit card debt. Medical bills are listed as general unsecured debt and can be easily wiped out in a Chapter 7 bankruptcy filing.

Filing for bankruptcy can help protect valuable assets, including your home, car, IRA and social security.  It will put an end to wage garnishment and any lawsuit being filed to collect on the debt, thanks to the protections of the automatic stay.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at


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