The Truth about Medical Bills

There is no doubt that the cost of living is on the rise. Americans struggle to put gas in their tanks and food on the table. Cash-strapped pocketbooks leave little room for medical and dental expenses, even in the best of times. The past decade has witnessed more and more Americans going without the medical and dental care they need and being unable to pay for the medical and dental services they require. Certainly, the number of Americans without the health coverage needed to pay for such services is at an all-time high; even with health coverage, many Americans are finding their mounting medical and dental bills more than they can manage in an economy in which they cannot even manage daily living expenses.

There are times when every person encounters a personal emergency that completely throws his or her finances helter-skelter. The story of twenty-three-year-old Addison is a prime example: Addison always considered herself a healthy young woman, until one ordinary check-up completely changed her life: she had cancer. With a low-paying job with basic health insurance, Addison soon found that her health care coverage was not enough to make up for the exorbitant costs of treatment. When Addison returned home from the hospital cancer-free six months later, her happiness soon turned to horror: she owed almost $100,000 in medical bills.

While the story of Addison is unfortunate, for many Americans, it is becoming a reality every day. The price of medical treatment for everything from diseases as serious as cancer to relatively benign check-ups for a senior citizen can put an insurmountable strain on a person or family's finances. It is a terrible scenario to find oneself in, as it often feels as though a family has to choose between the health of a loved one or staying financially afloat.

With 45 million uninsured Americans struggling to make ends meet, the increase in bankruptcy filings due to medical expenses is likely to rise. In addition to avoiding unnecessary medical expenses, Americans need to use bankruptcy wisely. Consult with a qualified bankruptcy attorney to discuss available options before filing.

The Truth about Medical Bills

Medical bills are one of the leading causes of the rise in the number of bankruptcies. One serious illness can wipe out a person's savings and cause numerous bills to pile up quickly. Even for those who carry medical insurance, out-of-pocket expenses, deductibles, and being unable to earn money quickly turn into a snowball of debt that is out of control. If you do not have medical insurance, the bills caused by an accident or illness can be astronomical.

Having high medical bills that you simply cannot pay, in addition to other debt, is one of the indicators that you may need to consider bankruptcy as a viable option. Unsecured debts, like medical bills and credit cards, can get people into trouble the most and are the ones that bankruptcy will relieve most easily. Medical bills include doctor's bills, hospital bills, equipment fees, ambulance fees, and other costs not covered by insurance.

The good news is that most of this debt can be resolved with a bankruptcy; but you may have to give up some of your high-value assets if you want to wipe it all away with a Chapter 7. If you can handle paying a minimum of $100 per month toward your debt for the next five years, then you may want to consider Chapter 13 instead, which will let you keep your assets

Delaying Bankruptcy for Medical Bills

As medical bills often make up a large portion of a bankruptcy filing, some financial experts advise consumers to wait until their medical debt is at its highest before filing a bankruptcy petition. Because the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 severely limits the time between bankruptcy filings, consumers should make sure that they can claim as much of their medical debt in their petition as possible.

Filing early while still in the midst of accumulating major medical expenses makes little sense. Waiting until major surgeries, procedures, and other high-cost medical expenses have finished accumulating makes the most sense for many people. If you are pregnant or have a scheduled procedure that you know will end with another bill that you cannot pay, your best bet is to hold off on declaring bankruptcy until after the bills arrive for that procedure. That way, they will be included in the bankruptcy, as well as your previous bills. Declaring bankruptcy and then receiving other bills may cost you additional money, or you may not be able to have them discharged.

Filing for Bankruptcy

Filing for bankruptcy is a relatively simple process once you have considered all of your financial options. The whole procedure typically costs about $300, and bankruptcy attorney fees are considerably less than the average lawyer fees. Ask the advice of your bankruptcy attorney before deciding which bankruptcy chapter to file under; most initial consultations are free, and you will gain plenty of insight into the whole process.