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Medical bills are the leading cause of bankruptcy

On Behalf of | Jan 22, 2021 | Bankruptcy

Those who have never declared bankruptcy often assume that it only happens because of irresponsible spending habits. They imagine people running up charges on their credit cards that far exceed what they’re going to make during the week. 

In general, this is not true. You do have a scattering of cases like this, but the overwhelming majority of bankruptcy cases in the United States just happen because of medical issues and related costs

Two-thirds of all bankruptcies involved medical debt

One study discovered that about 66.5% of bankruptcy cases, or two-thirds of all personal bankruptcy filings, were linked to medical issues. Annually, medical bills drove 530,000 families to bankruptcy. 

It happened in two ways. The first issue was the cost of the medical care itself, which is exceedingly expensive in the United States. Even those who carry insurance may not be able to afford all of the bills they still have to pay. Those with no insurance often have no hope of paying it themselves. 

The second issue was that the medical problems that triggered those bills also meant people missed time at work. If someone got injured and couldn’t work for months, or couldn’t work again at all, their income quickly dove to a level where they had nothing left. 

Your options when debt becomes overwhelming

Much of the time, your medical issues are entirely outside of your control. This can happen to anyone. What you can control, through the use of bankruptcy, is how you approach your outstanding debt. There is often a path to future financial success.