Medical bankruptcy: The Cure for What Ails Your Finances

Healthcare insurance is no longer a guarantee of protection from overwhelming medical debts, with one in five individuals reporting difficulty pay medical bills even with insurance.

When it comes to bankruptcy filings, some people are judgmental. They believe that bankruptcy is caused by poor spending habits or lack of discipline. In reality, life tends to be much more complex and with many bankruptcy filings, there may be no "one thing" that caused the accumulation of overwhelming debt. There is often a web of interrelated issues which, had things had occurred differently, an individual may have been able to overcome their temporary financial difficulty.

For instance, look at the role that medical expenses and debt play in forcing someone to file a bankruptcy in Tennessee. You may believe that because you have health insurance through your employer, this is not a concern. However, even with healthcare insurance, the cost of many medical procedures and treatments can mean financial disaster for anyone subjected to them.

Copay-ed and deducted to death

You may believe your health insurance is insurance against a financial calamity. That is until you have a medical condition which requires dozens of visits to doctors and specialists and you realize that the $5,000 deductible that seemed so reasonable when you signed up for coverage, really means $5,000, out of your pocket before the policy pays a dime.

Add to this co-pays for every visit to the doctor's office, and the burden of these expenses can become crushing. This also presumes you still have the income to pay those out-of-pocket expenses. What if your medical condition leaves you unable to work at all? In this case, you may struggle to decide which bills you will ignore and which you must try to pay.

One investigation found that one in five people with healthcare insurance have difficulty paying their medical bills. For those without insurance, the number approaches 60 percent. This is one reason why medical bills are often the trigger for a bankruptcy filing. Some studies have estimated more than 600,000 people file bankruptcy every year due to medical expenses.

Can you afford a heart attack or knee replacement?

Simple medical procedures can generate $10,000 bills, while more complex surgical operations, like knee surgery or a heart bypass operation run from $50,000 to more than $150,000.

If you have a job, as a truck driver or are some other type of independent contractor, you may have minimal insurance. Not only would you be attempting to deal with this staggering bill, but you may also be unable to work for weeks or months, depending on the speed of your recovery. With no income and massive bills like this, you could see your home in foreclosure and your truck repossessed, which could completely deprive you of any means of earning income.

Many people have difficulty paying these bills, often draining their savings and retirement account and many struggles even when they take a second job, if their medical condition permits. In this situation, a bankruptcy may be your only realistic option.

The irony of the expansion of health coverage to many of the previously uninsured is that it has largely been accomplished by designing plans with large deductibles and frequent co-pays, which for someone with moderate to low income can still mean bills they cannot afford.

Bankruptcy provides real hope

Bankruptcy can provide real debt relief from such dire economic situations. Speaking with Memphis attorney Ben Sissman, you will learn which type of bankruptcy will serve your needs best. A Chapter 7 or Chapter 13 can offer genuine hope, and permit someone recovering from a severe medical condition the chance for recovery of his or her equally severe economic condition.