Boston Bankruptcy Lawyer

Bankruptcy and Medical Bills

The majority of people feel that most individuals who file for bankruptcy did so because they have gotten way over their heads in credit card debt or some other over extension of their credit. The truth, however, is much more surprising. For 2003 and 2004, more than 50% of all personal bankruptcies were the result of medical debt. Even more shocking is that the bankruptcies were filed by people who had health insurance.

A significant percentage of those who list medical debt as the reason for their bankruptcy are over the age of 65. Other groups that have been disproportionally bankrupted by medical debts include single women raising children on low wages or who have been abandoned by former husbands that refuse to pay child support.

In many cases, the level of medical debt that triggers bankruptcy is not overwhelming. The statistics for 2003 revealed that roughly 20% of bankruptcy filings involve a medical debt of less than $1,0000; 40% had debt of less than $5,000; and 13% of bankruptcy filings involved a medical debt of more than $10,000. It would seem reasonable that people in this situation could have made some sort of payment arrangement to pay off the debt rather than file for bankruptcy.

One of the reasons that individuals might have chosen to file for bankruptcy could be that the medical collection industry is inflexible and unwilling to work out a reasonable payment plan for those who are unable to pay the debt off quickly. Many senior citizens live on a fixed income and do not have a lot of extra cash lying around that they can use to pay off an entire bill at once. A payment plan could have been useful for these people who, most likely, would have been able to pay off their debts without filing for bankruptcy.

Rather than work out a payment plan, hospitals, doctors, and medical collection agencies rush to the courthouse to file small claim lawsuits. There are, in fact, a number of small claims courts that are clogged with lawsuits, and medical debt lawsuits make up a large portion of a court’s docket.

The trend towards lawsuits is only going to increase as a number of hospitals, doctors, and other medical businesses turn their delinquent accounts over to collection agencies in 30 or 60 days rather than waiting the traditional 150 days. Another trend is for medical agencies to sue in small claims courts for trivial amounts rather than write the debt off as a bad debt.

Contact a Boston Bankruptcy Lawyer

If you are faced with exorbitant medical debts due to an illness in the family and are having issues paying them off, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346 to discuss which form of bankruptcy is best for you.