Rising health care costs can and do contribute significantly to bankruptcy filings, as the American Journal of Medicine estimates that about 62% of all bankruptcy cases are due to medical expenses, and in one particular study, 92% of those who filed bankruptcy for medical reasons had more than $5,000 in medical expenses. If you’re in a difficult financial situation due to overwhelming medical bills, remember that you have options, and bankruptcy can be a highly valuable resource.
Fortunately, most medical bills are dischargeable in bankruptcy, thereby releasing you from personal liability for the debt via a permanent court order. This discharge also prohibits creditors from taking further collective action against you.
Debt which is secured by collateral (known as “secured debt”) may still affect liens for properties, and not all medical debts are eligible for discharge in bankruptcy – although they are usually “unsecured debt” as opposed to secured – so speak with an experienced bankruptcy attorney to understand your options and make the best decision for your finances.