In the United States, and in Massachusetts as well, the leading cause of personal bankruptcy is medical expenses.  The soaring cost of medical expenses and stagnant wages for many Americans and Massachusetts residents alike have contributed to a significant number of bankruptcies due to the inability to pay back massive medical bills.  It is estimated that in 2013, nearly 2 million Americans will be affected bankruptcies caused by unpaid medical bills.

These high medical bills are often for individuals or for multiple family members, such as spouses or children.  The expensive bills can come from a host of different types of medical care, including childbirth, cancer treatment, and even emergency room visits.  Surprisingly, it is not only the uninsured who face great financial strains from medical care.  Estimates show that about 10 million insured Americans will face medical bills that are too large to be paid off quickly; these bills generally take over a year to pay down in full.

Affordable Care Act Cannot Solve All Personal Health Care Cost Problems

While the Affordable Care Act, often referred to as Obamacare, provides millions of people the option of obtaining personal health insurance, the cost of premiums and deductibles, not to mention out-of-coverage care, can mount quickly, making health care expensive even for those with insurance.

While those with health care insurance will generally be less likely to face personal bankruptcy as a result of large medical bills (since the insurance will defray at least part of the cost of most care), the remaining charges can still add up to thousands of dollars, which is not an insignificant sum for most Americans.

Out-Pacing Mortgage Defaults and Credit Card Debt

A common perception holds that consumer spending, high interest loans from credit cards, or expensive mortgages trigger most personal bankruptcies. In reality though, an inability to cover the costs of medical bills is by far the most common reason that individuals file for bankruptcy.

Additionally, even if the medical bills are not the ultimate reason someone files for bankruptcy, they often act as a contributing factor.  For instance, a person facing expensive medical bills may pay those bills with high interest credit cards. Eventually though, the person may not be able to keep up with the payments in light of the high interest rates.

Indeed, many people facing insurmountable medical bills have to make highly unfortunate choices.  These choices include choosing between paying medical bills or paying for other necessary goods, such as food or housing.

Choosing bankruptcy is a very difficult decision, but unfortunately is a decision that many Americans across the county must make if they are facing a dire financial situation as a result of medical bills.

Personal Bankruptcy Questions?

Bankruptcy law is very complex and the outcomes of each case are extremely important to the debtor and creditors involved.  To get answers to all of your questions about bankruptcy law in Massachusetts, please contact the Law Office of Brian L. Lewis.