Bankruptcy is often a last resort for people who have experienced major unplanned financial hardships. In the United States, the five leading causes of bankruptcy are medical expenses, job loss, poor use of credit, divorce or separation, and unexpected expenses such as property loss through a natural disaster. Read on to learn more about why medical bills top this list.
Majority of Personal Bankruptcies
In a study of 2007 bankruptcy filings, medical problems were found to have caused 62 percent of all personal bankruptcies. Of those who filed, more than 75 percent had medical insurance when their illness began.
Cost of Medical Expenses
In the same study, researchers looked at the average out-of-pocket expense for those who filed personal bankruptcy. For those with private insurance, the average medically bankrupt family was out almost $18,000. Families who were uninsured saw an average medical bill of nearly $27,000.
Most Expensive Illnesses
The study found that individuals with diabetes and neurological illnesses, such as multiple sclerosis, had the highest costs of those who filed. For half of the families in the study, hospital bills were the largest single expense.
Link to Bankruptcy
Being uninsured or underinsured is a big problem for many American families. When faced with expensive medical bills, many people will be forced to mortgage their homes, leave their jobs, and use credit cards. In another study in 2007, researchers looked at low- and middle-income households with credit card debt. In these households, 29 percent of families had used their cards to pay off medical expenses.
Have you experienced a major financial upset? Bankruptcy may be the best option for your situation. To speak with a Milwaukee bankruptcy lawyer, call the Burr Law Office at (262) 827-0375. We provide affordable debt relief services to help you get a fresh financial start.