Personal bankruptcy effective for handling medical debt

There are a lot of things people can do to avoid taking on extra debt. Limiting shopping trips and using credit cards less often are just two examples. The problem is that there are so many things outside of the average person’s control that can dig them deeper and deeper into debt. Anyone who has visited a doctor or hospital in Connecticut recently can probably understand why so many people pursue personal bankruptcy because of medical debt.

According to a 2019 study from the Consumer Bankruptcy Project, medical bills show up in 65.5% of bankruptcies every year. The problem itself is much bigger than half a million annual bankruptcy filings. One out of every six people in America has at least one delinquent medical bill, and all those past-due bills add up to $81 billion.

While an enormous bill can follow virtually any type of medical care, people living with chronic illnesses are not hit quite as hard as those who experience one-time adverse health events. A joint study from The New York Times and the Kaiser Family Foundation looked found that of those struggling with medical debt, only 33% say the bills piled up over a period of time. The other 66% say the trouble started all at once, usually with treatment or even hospitalization for something like an accident.

There are many nuanced factors that can also affect how much medical debt a person has. For instance, health insurance coverage varies from person to person, and the cost of health care varies between different regions in Connecticut, sometimes even within the same city. So even though people might not like the idea of filing for personal bankruptcy, it could be the most effective — and sometimes only — approach for handling medical debt.