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Is consumer bankruptcy a good option for mounting medical bills?

On Behalf of | Jul 12, 2021 | Consumer Bankruptcy |

More and more Illinois residents are looking to consumer bankruptcy as a way to clean the slate. While some are in over their heads because of credit card debt, there are a growing number of individuals who struggle with medical debts. Is bankruptcy the way out?

Even people with insurance drown in medical debt

Most insurance plans are more affordable when you select an option with a higher deductible. This typically comes into play for families with multiple children. However, these high deductibles can lead to plenty of costs upfront. Examples include co-pays, medications and deductibles. In addition, if a doctor isn’t in a particular network, you may have to choose between receiving treatment from a doctor you know and trust, or one whom you don’t know.

Will bankruptcy discharge medical debts?

Estimates suggest that 62.1% of bankruptcies happen due to medical problems. However, there are some situations when you can’t get out from under it – even if you go bankrupt:

  • You took out a second mortgage to pay the medical bills.
  • You lied about your income when you applied for a loan to cover medical expenses and now want to include it in a consumer bankruptcy.
  • You bought luxury goods with the same credits cards you used to pay for medical costs.

An alternative to going bankrupt

If you’re not sure that your debts would qualify for discharge, you may be able to negotiate with the individual creditors. Even if they send your bills to a collection agency, there’s a good chance that these companies would rather see a little money than nothing. If you do decide to go forward with consumer bankruptcy, it might be a good idea to discuss your options with an attorney to protect your rights.