Bankruptcy may provide relief for Floridians burdened with medical debt

By May 27, 2014No Comments

When a person becomes inflicted with a severe injury or illness, the last thing he or she wants to think about is how much his or her hospital stay and recovery will eventually cost. After all, the “sticker shock” that accompanies today’s skyrocketing healthcare costs can be difficult for anyone deal with.

Consequently, it should come as little surprise that overwhelming medical debt is one of the leading reasons individuals seek the protection of bankruptcy. In fact, according to 2009 Harvard University study, a staggering 60 percent of personal bankruptcies can be attributed, at least in part, to unpaid medical bills and illness.

Florida medical bills and bankruptcy

In Florida, the problems surrounding medical debt are especially precarious given that the U.S. Census Bureau estimates that nearly 3.8 million people are not covered by health insurance in the state – which represents roughly 20 percent of the state’s entire population. Unfortunately, when one of these individuals suffers an accident or serious ailment, he or she will be responsible for the entire medical bill with no assistance from insurance.

However, it is important to note that the financial burdens imposed by medical bills do not solely impact those without health insurance. For instance, many individuals who actually have health insurance opt for coverage based on low monthly payments – but high deductibles. Sadly, the resulting expensive deductibles can lead to those with health insurance to become encumbered with medical debt if the need for hospitalization arises. Indeed, the study conducted by Harvard University mirrored this reality when it discovered that 78 percent of those who filed for bankruptcy due to health problems actually had some type of health insurance coverage.

Thankfully, bankruptcy is one of the most effective ways to protect oneself from unexpected or insurmountable medical debt. For example, many medical bills are fully dischargeable during a Chapter 7 bankruptcy in Florida – which means the individual will no longer be responsible for them. In addition, the automatic stay issued upon the filing of bankruptcy will stop all collection actions against the individual, and make debt collectors cease their harassing phone calls.

Bankruptcy was created as a means for those buried under hopeless debt – including medical debt – to obtain a fresh financial start. If you are currently struggling with monthly bills and believe bankruptcy may be a viable option, it is always best to seek the counsel of an experienced bankruptcy attorney who can delineate what your rights and options may be given your particular circumstances. A skilled attorney can not only assist with the bankruptcy filing but also help to ensure you are protected during the entire process.