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Medical debt the leading cause of personal bankruptcy

There are many personal and financial situations which can lead a family or individual to consider bankruptcy. For one Connecticut family, the high cost of giving birth in a hospital has made personal bankruptcy an option. Health care costs and outstanding bills can be a serious financial issue for underinsured individuals.

Although the Connecticut woman had health insurance that covered some pregnancy costs, additional expenses for doctor's trips and the birth itself added up throughout the process. The 2016 birth was a positive experience and the baby was born healthy. However, following the birth, the family was left with a large bill for uncovered expenses. Currently, the family is facing nearly $150,000 in medical debt.

In the United States, medical debt is the number one reason people file for personal bankruptcy according government and credit agency figures. Across the country, 43 million people are struggling with medical debt. The debt not only limits peoples' security and threatens their assets, but may also prevent people from seeking needed care to avoid the added expense.

Debt collection companies often will purchase medical debt for pennies on the dollar, so the money is often owed to a third party. This can add a layer of complexity for those facing this debt. In some cases, charities such as RIP Medical Debt in Connecticut may help pay down or pay off these bills, but often families must resolve these issues on their own. Those facing large medical debt who are considering personal bankruptcy should speak with a lawyer to understand the processes and implications involved in this decision.

Source: NBC, "Wolcott Family Considers Bankruptcy as Childbirth Bills Mount", Sandra Jones, March 28, 2018

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