Medical debt weighing you down? Consider bankruptcy.

Medical debt pushes thousands of people to bankruptcy each year.

Despite the passage of the Affordable Care Act - popularly known as "Obamacare" - which decreased the numbers of uninsured Americans to its lowest point in recent memory, we are still collectively struggling to pay our medical expenses. The Consumer Financial Protection Bureau released research earlier this year showing that 59 percent of us have been contacted by a medical debt collector.

Collective medical debt collection is a multi-billion-dollar industry, and those debt collectors are well-known for a particularly high level of harassment, threats and scams. In addition, high medical expenses are one of the few areas of debt that cross socioeconomic, age and cultural demographics. We may not all be facing repossession of a sports car, for example, depending on our economic station, but we could all potentially face an illness or injury.

So, with more people insured, why are medical expenses still pushing so many families into debt? Well, this is due to a number of factors:

  • Employers and insurers passing along more and more costs to the insureds; one recent study by the Kaiser Family Foundation found that out-of-pocket costs for the average insured have increased 83 percent since the year 2000
  • Higher deductibles; these rose an astounding 255 percent between 2006 and 2015
  • Slow minimum wage increases; the federal minimum wage hasn't risen since 2009, and remains at only $7.25
  • Fewer cost of living increases across industries
  • Higher costs for life-saving medications; for example, insulin and emergency anti-anaphylactic agents (like the EpiPen®) have seen triple-digit cost increases in recent years
  • Higher costs of living in many areas, particularly urban centers
  • An aging population
  • More families providing caregiving services for elderly or special needs loved ones
  • Newer techniques and medications not being covered by insurance, or being covered at premium/formulary/out-of-network rates

Stopping the harassment

There are a few different methods for handling harassment from medical debt collectors. You can work out payment arrangements directly with the collection agency or the original provider if you are able. Oftentimes, if you can pay a lump sum, the debt can settle for much less. It may involve taking out a loan from a friend, relative or bank, but at least you won't be dealing with pushy creditors, harassing phone calls and threatening letters.

Another way to address a mountain of outstanding medical debt is with a bankruptcy filing. A Chapter 7 filing will wipe out all eligible unsecured debt. A Chapter 13 filing is also very effective, allowing you to pay back a portion of your debt for a set time, and then discharging the remainder.

When you are dealing with seemingly insurmountable debts, give serious thought to consulting an experienced bankruptcy attorney. In the Bridgeport, area, reach out to the Law Office of Russell Gary Small, P.C. He has decades of experience offering skilled, affordable legal representation to people just like you. Call today at 800-261-3275 or contact the firm online. Spanish speaking services are available.