What is Medical Bankruptcy?

In today's economy, it seems like more people are filing for bankruptcy than ever before

. There are many causes of bankruptcy, including loss of employment and financial debt due to business. One of the most common reasons for filing for bankruptcy in the United States is medical debt.

Medical bankruptcy is not a legal term; rather, it is a general term that refers to filing for bankruptcy due to medical related debt. This is a major problem in the U.S. that has only increased during the recent recession. Many people mistakenly believe that they will never fall victim to medical bankruptcy because they have health insurance. This is false: in fact, more than half of all bankruptcies filed due to medical debt involve people who had health insurance at the time that they began incurring the medical debt. Thus, it is clear that having health insurance provide a false sense of security for many people.

There are other common misconceptions regarding medical bankruptcy claims. For instance, most people who file for bankruptcy due to medical debt owe less than $5000 in medical bills. The reason that they still choose to file for bankruptcy is that health insurance companies have become more aggressive in recent years about collecting their money. Many people become overwhelmed and are not clear about what their options may be. As a result, they file for medical bankruptcy instead of working out another payment plan.

On the other hand, filing for bankruptcy might be the right option in certain cases. For example, families who owe massive amount of medical debt may not have another choice. However, anyone who is thinking about filing for Chapter 11 bankruptcy must carefully weigh the pros and cons first before making their final decision. Filing for bankruptcy can have long-lasting consequences. It is best to consult a lawyer who specializes in medical bankruptcy in order to make the right choice.

Along with writing, Joseph enjoys spending time in his flower and vegetable gardens.

What is Medical Bankruptcy?

By: Lisa A Mason

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