Medical Bills Are Reason Why More Than Half of Filers File for Bankruptcy
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Bankruptcy in the United States

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Bankruptcy is on the rise in this country, with over 1.4 million people filing in 2011.

As more people seek relief from the economic pressure of the recession, it's important to highlight what kinds of debts are leading people toward bankruptcy. Should you or someone you know have questions about bankruptcy law and how it relates to finances, consider speaking with a bankruptcy attorney.

Medical Bills Causing Half of Bankruptcies in US

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Medical Bankruptcy

  • A study released by the American Journal of Medicine claims 62.1% of all U.S. bankruptcies in 2007 are credited to medical bills.
  • An earlier study was conducted in 2001 and found that 46.2% of bankruptcies were led to by medical problems.
  • When using the same definition of "medical problems" for 2001 that was applied to the 2007 study, bankruptcy caused by medical issues rose 49.6%.

The Process:

  • Random sample taken of 2,314 American filers in 2007.
  • Court records were abstracted.
  • 1,032 filers were interviewed.

The Results:

  • 62.1% of all bankruptcies are medical.
  • 92% of medical debt holders had debts exceeding $5,000 or 10% of their family's income.
  • The remaining 8% qualified for bankruptcy after losing or mortgaging their homes to pay medical bills.

The Medical Bankruptcy Filers

  • Average filer is 45 years old.
  • 45% are married.
  • Average family size is 2.79
  • Over half attended college.
  • Almost two-thirds own their homes or lost a home in the last five years.
  • Average monthly household income is $2,586.
  • Average net worth is $44,622.


  • Less than one quarter of debtors were uninsured.
  • Medical filers experience lapses in coverage more often than non-medical.
  • The majority of medically bankrupted families had health insurance at the time of filing.

The Disconnect:

  • Only 29% believed medical bills were the reason for bankruptcy.
  • 57.1% had problems paying medical bills prior to filing.
  • 38.2% of filers (or their spouses) lost significant income while caring for sick family members.
  • 40.3% lose income because of their own illness.

The Big Picture:

  • Those bankrupted by medical costs owed an average of $4,988 per person directly to doctors and hospitals.
  • Those bankrupted, but not by medical costs, only owed $256 per person to the same institutions.
  • People who had lapses in coverage owed $5,598 more per person than those that did not.
  • Those not bankrupted by health care costs had, on average, only $300 of medical debt per person.

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