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Common Concerns & Questions About Bankruptcy

Many fear serious illness less than serious medical expenses

| Feb 15, 2018 | Chapter 7 |

Tyler residents who are worried about their health care expenses are not alone. Roughly three in four Americans have experienced an increase in the cost of health care in recent years, leading to concerning statistics about their ability to stay on top of medical costs.

More than one in three Americans, according to a new study, reported that they would not be able to cover a bill of more than $100 for an unanticipated medical expense. Perhaps surprisingly, more than half feel that receiving a serious diagnosis is just as bad as receiving a medical bill they cannot afford to pay. And around one in 10 would rather take the diagnosis over a bill they could not pay.

People today are encouraged to keep enough saved up to cover a health care emergency. But consider that almost 40 percent of Americans have no savings at all; of those who do, the number with over $1,000 in savings is less than half. The problem afflicts the insured and uninsured alike, as many with insurance have sky-high deductibles they must reach before insurance begins covering their costs.

If there is any good news in all of this, it is that the bankruptcy code provides for protections against crushing medical debt. Because medical debt is unsecured debt, Chapter 7 bankruptcy can discharge it completely. In fact, despite some perceived stigma attached to bankruptcy, many with medical debt are taking advantage of it: medical debt is the single largest factor – more so than credit card debt, student loans or foreclosure – underlying bankruptcy filings in America today.

The requirements for Chapter 7 bankruptcy, however, are not negligible. Working with a bankruptcy law professional can help Tyler residents understand their options and whether they might be able to achieve a fresh financial start through Chapter 7.

Source: The Motley Fool, “More Than Half of Americans Fear Medical Bills as Much as Health Issues Themselves,” Maurie Backman, Feb. 5, 2018