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The bankruptcy and medical debt connection

Debt struggles are nothing new to Oregon families. Certainly the economic challenges of recent years have exacerbated many of the experiences for some people but these types of challenges have always and will always exist. Medical debt, lack of employment, divorce, deaths or other factors can all contribute to a person’s inability to make ends meet. Many options can exist to help people get back on their feet but identifying the right one can be difficult at times.

Sometimes it is not just being able to address existing debt but how to avoid it that can be confusing for consumers. The need for health insurance has been a prominent discussion in the country for several years now. Many people point to the lack of health insurance coverage as a situation that potentially increases a person’s risk of needing to file bankruptcy. A recent news story reviewed various statistics and looked more closely at how the lack of insurance truly affects a person’s need to pursue a Chapter 13 or Chapter 7 bankruptcy.

After reviewing the varying statistics, the article’s writer identified the challenges in determining a true relationship between bankruptcy risk and medical debt. However, in the end, the assertion was that people without insurance have a roughly one percent greater chance of incurring $115,000 worth of medical expenses in a year. Adding this to other factors, it is believed that the lack of health insurance increases the need for bankruptcy relief by less than 2 people for every 1,000.

Despite the challenges in obtaining a firm statistical view, it is known that unmanageable debt from medical expenses is a common factor in bankruptcy actions. If you are struggling with hospital bills or related bills, you may wish to talk to an attorney to learn about your options for help.

Source: Forbes, “How Risky Is it To Be Uninsured? Part II: Financial Risk,” Chris Conover, April 14, 2014

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