According to Bernie Sanders, roughly 500,000 people have gone bankrupt because of medical debt. This figure is based on a study conducted in 2019 that analyzed 910 bankruptcy cases between 2013 and 2016. It revealed that 65.5% of those bankruptcies were caused by medical debts. However, researchers are unsure as to whether the debt itself is to blame for Texas residents and others filing for bankruptcy. Instead, it may be the lost income after experiencing an injury that leads to financial distress.
Another 2019 study found that over 137 million Americans had experienced a financial hardship because of medical debt. While medical debts may be difficult to deal with, there are ways to potentially avoid going bankrupt. For example, individuals are encouraged to build an emergency fund to help pay for unexpected medical and other expenses. This fund should be able to cover a person’s living expenses for up to six months.
Patients might be able to save money by ensuring that a care provider is in their insurance company’s network. It can also be a good idea to negotiate with a medical service provider to reduce the amount owed to a doctor or hospital. If possible, ask to create a payment plan instead of putting debt on a credit card. Doing so may result in paying less interest on an outstanding balance.
Individuals who are struggling to repay medical debts or other outstanding debt balances may be eligible for Chapter 13 bankruptcy. Filing for bankruptcy may make it possible to reorganize debts or have certain balances discharged. While a bankruptcy case is open, creditors generally are not allowed to contact a debtor. They may also be barred from following through with a planned lawsuit or taking other collection actions such as a foreclosure or repossession.