Medical debt continues to be a leading cause of new bankruptcy filings in Ohio
If the number of bankruptcies filed is any indication of an economic recovery, the latest statistics indicate that Ohio is recovering from the recession of 2008. According to the data, the number of personal bankruptcy filing declined in Ohio by five percent to 46,892 filings during 2013.
Along with the good news, the data also had some negative points. Although the number of bankruptcies declined in Ohio, the decline was significantly lower than the national average of 12 percent. In addition, the data indicated that the reason why many Ohioans were filing for bankruptcy had little to do with the economy. Medical bills were cited as one of the leading reasons that pushed Ohio residents into bankruptcy.
Similar Medical Debt Trends nationwide
Ohioans are not alone in struggling with medical bills. According to a 2012 study published in the American Journal of Medicine, which analyzed bankruptcy data between 2001 and 2007, over 62 percent of bankruptcies were triggered by medical bills, at least in part. The study also indicated that, unsurprisingly, as healthcare costs continue to rise, medical bills became more of a financial burden to Americans. During the six-year period of the study, the number of bankruptcies where medical bills were a cause rose by about 50 percent.
The study also found that having health insurance was not a panacea against bankruptcy. Among the bankruptcies filed because of medical bills, 75 percent of the filers had health insurance. The study found that the despite having insurance, many of these consumers were saddled with out-of-pocket costs for expenses such as prescription drugs and medical equipment, many having outstanding bills well over 10 percent of their pretax income. Others were forced to pay for their medical procedures in full, because the insurance companies cancelled their policies once they required treatment.
Bankruptcy can help
For those struggling with medical debt, bankruptcy can offer a way out. Once bankruptcy is filed, the automatic stay goes into effect, which halts all creditor collection efforts, such as harassing phone calls or collection lawsuit. Regardless of whether the debtor files for Chapter 7 or Chapter 13 bankruptcy, medical debt is dischargeable, meaning that the debtor is relieved of the obligation to repay the debt. Once bankruptcy has concluded, the debtor emerges free of medical debt with a fresh financial start.
Bankruptcy is not a solution for everyone. For this reason, if you are struggling with medical debt, it is important to consult with an experienced bankruptcy attorney. An attorney can accurately assess whether bankruptcy would be a good fit for your situation.
