The country’s recent slew of healthcare reforms may be helping millions of Americans get access to health insurance, but it still isn’t alleviating the oppressively high costs of seeking medical care.
And when faced with medical bills reaching into the tens of thousands, a growing number of Americans are left with no choice but to seek out a Chapter 13 or Chapter 7 bankruptcy attorney for bankruptcy help.
According to a January 28 article from The Conversation, Consumer Financial Protection Bureau data has found that approximately 43 million Americans currently have debt from unpaid medical bills on their credit reports. Even more telling? The fact that as many as 18% to 26% of the approximately 1,000,000 consumer bankruptcies filed annually are filed due to outstanding medical debt.
So why should we be worried about these statistics?
Falling into medical debt isn’t the same as getting into other types of debt. People don’t have medical debt as the result of unwise spending habits — they get into medical debt because they got sick, and have no other choice but to seek care for their illnesses, even if they don’t have insurance. They don’t choose to accrue debt, nor do they have much control over how much debt they have.
Some changes to the system are being made to protect consumers from having to seek out a Chapter 13 or Chapter 7 bankruptcy attorney, however. According to The Conversation, the Obama administration has put new rules in place to better protect low-income consumers from nonprofit hospitals’ aggressive debt collection practices. In addition, Fair Isaac Corp (FICO) now weighs medical debt separately from other debt when calculating consumer credit scores, realizing that this debt is rarely under the consumer’s control.
Even with these changes, the high cost of medical care is a real problem — and it’s the average American who is taking the worst impact.
What are your thoughts on the rise in medical debt driving more people into the Chapter 7 bankruptcy timeline? Share what’s on your mind in the comments below — or feel free to ask us any other questions you may have about getting help with filing bankruptcy.