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Medical debt a major factor in bankruptcy

Many people in New Mexico and across the country struggle with difficulties making ends meet. Despite reports about the improving economy, people suffer with hefty credit card bills, car loans and other types of debt that they are unable to pay off. Medical bills rank especially high for many people suffering with insurmountable debt and are often the largest single reason why people decide to file for bankruptcy. The problem is so significant that medical bills and the health care system have become a major topic for debate in the upcoming presidential elections. According to one study in 2019, 65.5% of people who file for bankruptcy do so largely due to medical bills.

Up to 500,000 personal bankruptcy filings across the country may be linked to medical debt. Even more, millions of people are dealing with delinquent medical bills. Medical debt is estimated to be a major factor in why a growing number of elderly Americans are filing for bankruptcy. According to one study, one-sixth of all Americans had at least one overdue medical bill affecting their credit report while 137 million people reported financial difficulties due to health problems.

Single, severe incidents are more likely to lead to a financial crisis. Even people who can regularly pay their doctor bills may find it difficult to cope with a major hospitalization or a severe illness like cancer, which can involve costly prescription drugs. Medical debt can affect people of all ages, but young people in their late 20s, after they have aged out of their parents' health care plans, are particularly likely to carry hefty bills.

When people are unable to make ends meet, they may find themselves dealing with collection calls and a sinking credit rating. A bankruptcy attorney may provide advice on options that may help people find debt relief and move toward a new financial future.

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