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Bankruptcy is an effective tool against rampant medical expenses

There is no relief in sight for Americans in Florida and elsewhere who are suffering under the pressure of uninsured medical expenses. With a very large degree of uncertainty at this point regarding the future of nationwide health care coverage, and based on prior problems not solved by the Affordable Care Act (ACA), there is plenty of debt being attributed to consumers who cannot afford to pay the often exorbitant costs for medical care. This debt spirals into credit card use and second mortgages, leading in some cases to bankruptcy filings to curb the runaway financial descent.

Even before the present crisis regarding the threatened repeal of the ACA, insurers were hitting innocent patients with large bills that the companies asserted went beyond the coverage provided. This wore many consumers down and made them turn to credit cards to try and pay the debt. Where the income level was insufficient to pay the credit card debt, sometimes billed at 25 percent interest, those affected quickly found themselves in a very deep hole without a ladder to climb out.

Another ultimately fruitless method used by consumers to pay off medical debt was by taking out a second mortgage on their residences. This is a disfavored act that can result in eventual foreclosure where current income does not match the minimum payments required. Some consumers thus built up an unmanageable debt load by trying to take on additional debt to pay off medical debt.

In that context, experts conclude that medical expenses lead to about 62 percent of the consumer bankruptcies filed in Florida and nationwide. Where the debt load is unwieldy and current income is insufficient to pay it off over the next few years, there is likely the need to consider bankruptcy. It is the only remedy that wipes out debt, provides a fresh start and allows the individual or married couple a chance to wipe the slate clean.

Source:, "Health Care Costs Number One Cause of Bankruptcy for American Families", Grant McNutt, Feb. 7, 2017

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