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2 reasons people with medical debt decide to file for bankruptcy

On Behalf of | Feb 1, 2023 | Bankruptcy And Debt Relief

Bankruptcy is a common response to overwhelming medical debt. People can accrue tens of thousands of dollars in medical debt in just a few days of intensive trauma care. Those who require treatment for cancer or other severe medical issues could have hundreds of thousands of dollars in unpaid medical bills.

When someone has missed work because of a medical issue and now has insurmountable medical debt, they may eventually decide to file for bankruptcy. A personal bankruptcy filing halts collection activity and can discharge unsecured debts, like medical bills not covered by insurance.

Why is bankruptcy a common solution chosen by those with high levels of medical debt?

  1. The stress of medical debt causes harm

There is a massive body of research into the physiological consequences of psychological stress. Simply being aware of how much medical debt you have could affect your blood pressure and your ability to sleep at night.

When you add aggressive collection efforts into the mix, your debt could cause serious health issues. It could even undermine your recovery from your medical condition or injury, as stress tends to affect how well the immune system operates. Those who believe that stress has started to affect their health may turn to bankruptcy to reduce how stressed they feel about their finances.

  1. They face a medical lawsuit

Medical businesses often lack compassion for those who required treatment and now struggle to pay their debts. It is unfortunately quite common for hospitals and other healthcare creditors to take someone to civil court over their debts.

A creditor lawsuit could lead to the garnishment of someone’s wages or even a lien placed against their primary residence. Filing for bankruptcy can prevent a creditor lawsuit or can lead to the courts dismissing it instead of ruling in favor of the creditor, as is very frequently what happens.

Bankruptcy allows someone recovering from a recent medical issue to eliminate their unsecured medical debts and possibly other debt, like their credit card balances. Regaining control over their finances can reduce their stress and improve their quality of life, which is why personal bankruptcy is a common choice for those struggling with insurmountable medical debt.