Medical emergencies can lead to unmanageable debt that necessitates bankruptcy.

Several studies in recent years have shown that the majority of people filing for personal bankruptcy list medical debt as a contributing factor to their decision to seek debt relief assistance. Surprisingly, most people who reported medical expenses as a key impetus for their bankruptcy filings had health insurance coverage. Unfortunately, even top-tier insurance can still leave patients owing thousands or tens of thousands in out-of-pocket expenses, including:

• Co-pays for office visits, urgent care and emergency room treatment
• Services of out-of-network providers
• Brand name prescription medications
• Medical equipment rentals or purchases
• Experimental drugs or treatments
• Alternative treatments for some conditions (like, for example, using acupuncture for pain management instead of chemotherapy-related nausea)
• Travel costs to get to and from providers
• Retrofitting/remodeling homes to be wheelchair accessible following a catastrophic injury
• Lost wages while recovering from surgery or while receiving inpatient care
• Other incidentals related to emergency or chronic conditions

Only time will tell if such programs as the Affordable Care Act (colloquially known as “Obamacare”) will have a significant impact in lowering the number of personal bankruptcy filings related to medical expenses. In the meantime, however, healthcare costs have continued to rise at a rate well above inflation for years now, and in a post-recession economy, many people simply cannot afford the high costs of treatment. They are stuck with bills they cannot pay and are facing the possibility of unending harassment from creditors.

Making a bad situation even worse

Medical debt collectors are notoriously some of the most aggressive in the industry; medical bills are turned over to collections more quickly than other bills, and these debt collectors are relentless with their harassing phone calls and threatening letters. People on the receiving end of such harassment are desperate to make it stop, and might take such extreme measures as:

• Not making auto loan, utility or mortgage payments (which can set them up for foreclosure or repossession)
• Taking out risky or high-interest loans
• Incurring thousands of dollars in high-interest credit card debt

Thankfully, there is a better way: medical expenses can be discharged through a Chapter 7 or Chapter 13 personal bankruptcy filing. If you find yourself struggling to make minimum payments on your debt with no end in sight, bankruptcy might be the best choice for you. Bankruptcy will discharge your unsecured debt – including your medical bills – and allow you to get a fresh financial start. To learn more about how bankruptcy can help you get out from under the cloud of debt, contact experienced Chattanooga bankruptcy attorney Kenneth C. Rannick. He has helped thousands of people throughout Tennessee and Georgia file for bankruptcy protection over the years, and he can help you, too.