The Truth About Health-Related Bankruptcy

Bankruptcy is a hard time for anyone who has to go through it. For those with medical bills, encroaching financial troubles are an everyday concern.

In fact, is it reported that one of the main reasons why people file for Chapter 7 bankruptcy is because of medical bills. In this infographic, you’ll see exactly how many Americans are afflicted by debt from their medical expenses.


The Truth About Health-Related Bankruptcy

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Reasons for Declaring Medical Bankruptcy

  • Illness and medical bills accounted for 62.1% of all bankruptcies in 2007.
  • 40.3% of debtors suffered income loss as a result of an illness.

Reasons for Declaring Bankruptcy

Medical Bills Medical Problems of Self or Spouse
57.1% 32.1%
  • 40% of medical bill debtors had a lapse in insurance coverage sometime in the 2 years prior to filing, whereas less than 25% of debtors were actually uninsured when they filed for bankruptcy.
  • While 76% of households owe on medical bills, 47% have credit card debt as a result of medical expenses.
  • Of those who do not owe medical bills on a credit card, the average debt is $6,476.
  • Around 51% of families have attempted to reduce medical bills by:
    • Refusing or delaying a prescription refill - 33%
    • Skipping out on a medical test, follow up, or treatment - 36%
    • Not going to a doctor for a medical issue - 39%

Declaring Chapter 7

If you declare Chapter 7, you probably have problems with an unsecured debt, such as medical bills or credit cards.

You’re not alone.

Percent of Unemployed Debtors Falling Behind on Payments by Age

18 to 29 30 to 49 50 to 64 65 or older
22% 35% 19% 12%

Top Five States for Bankruptcies Per Capita in 2012

Position 1 2 3 4 5
State Tennessee Nevada Georgia Utah Alabama
% of Bankruptcies that were Chapter 7 52% 81% 53% 65% 44%
Filings Per 1,000 people 7.19 7.00 6.65 5.87 5.87
  • In 2011, over 1 million people filed for Chapter 7 bankruptcy.
  • Debtors filing Chapter 7 owed well over $348 million to unsecured creditors in 2011.
    • The average person owed $11,079 in unsecured funds.

Conclusion

Medical bills can add up quickly, especially if someone has continuous health problems that require constant treatment. If you are falling behind on your medical financial obligations, remember that you are not alone and there are many people struggling with this ongoing problem.

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This entry was posted on Monday, July 30th, 2012 at 9:29 am and is filed under The Truth about Bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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