Medical debt is a common cause of consumer bankruptcy filings. Losing one’s health insurance, also puts individuals and families at an increased financial risk. According to the American Bankruptcy Institute (ABI), when someone has an interruption in their health insurance coverage, this gap in coverage nearly doubles that person’s chances of filing for bankruptcy.
The ABI looked through figures from the Bureau of Labor Statistics for more than 12,500 individuals. Their findings revealed a “strong association” between losing insurance coverage and consumer bankruptcy filings. ABI narrowed down their research even further to look at 454 people between the years 2008 and 2014 with similar incomes and debt-to-income ratios, who all filed for bankruptcy in that span of time. While many of these bankruptcy filings were driven by health issues, job loss and divorce, a great majority of them had to do with the fact that the person or someone that depended on the insurance carrier did not have coverage at the time of their illness or injury.
Even with health insurance, medical costs can be enough to put someone in debt. Not having any insurance coverage, however, can make paying even the most basic of daily expenses an impossibility. If someone does not have health insurance coverage, chances are he or she also does not have stable or adequate income to meet these medical situations. This combination can put an individual in a no-win situation where bankruptcy is the only way out.
According to the Kaiser Family Foundation, more than half of Americans reported having put off a doctor visit themselves or knowing someone who has done this due to the cost and the inability to pay for that medical expense in the last year alone. Of those surveyed, one-third of those who had insurance coverage said that it was difficult for them to even afford paying their deductibles for these expenses, which can end up being in the thousands of dollars annually.
In July 2019, ABI found a five percent monthly increase in total bankruptcy filings. As of July, there were 64,283 bankruptcy filings which is up from the 62,241 from the same period in previous year. There were also approximately 1,000 more consumer bankruptcy cases by July than in the same time period in 2018.
Previous studies on the subject have found that two in every three bankruptcy filings are the result of medical issues, including bills, loss of income due to an illness or a combination of the two. Like most unsecured debt, medical bills are discharged in a bankruptcy case.
Click here to read more on this story.
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 McMaken website at www.miamibankruptcy.com.