Statistics on Bankruptcies caused by Medical Bills

Many people assume that all people that file for bankruptcy have done so because they have carelessly
lived a lavish lifestyle they cannot afford or have piled up too many debts on their credit cards on
silly things like new TVs or other consumer goods. While this is a common supposition, it could not
possibly be further from the truth. Yes, there are people who declare bankruptcy after piling up debts,
but many of the expenses of the “lavish lifestyles” that push people into bankruptcy were found to be
medical bills.

According to a 2007 study published by researchers from Harvard University, 62% of the people they surveyed
who had filed for bankruptcy in Massachusetts in the first part of that year had done so because of
medical bills. The new study reveals that, overall, bankruptcy caused by medical bills has jump nearly
50% in a six year period. In 2001, 46% of bankruptcies were caused by medical bills.

The study counted an individual as having filed for bankruptcy due to medical bills if the individual’s
medical bills amounted to more than $5,000 or 10% of the pretax incomes, if the individual or family
mortgaged or re-mortgaged the family home to pay back the bills, or if they lost a large portion of
their income due to an illness.

In addition, the study found that medically bankrupt families had, on average, $17,943 in out-of-pocket
expenses. Those without insurance were found to have $26,971 in out-of-pocket expenses while those with
insurance experienced $17,749 out of pocket. The average reflects the trend that even those with insurance
are not safe since 75% of the medically bankrupt families had health insurance.

Contact a Boston Bankruptcy Attorney

If you have been injured or sick and are now facing bankruptcy due to your medical expenses,
contact the Boston bankruptcy attorneys of Joshua Spirn & Associates at 800-975-5346.