A new study from a United States think tank suggests that credit card debt, mortgages and other forms of debt pale in comparison to medical bills as a motivator for bankruptcy filings. Indeed, the number one cause of personal bankruptcy in Michigan and elsewhere in the nation is medical debt. Thankfully, those who file are in a position to restructure that debt in order to get back on top.
The average American household brings in roughly $50,000 a year. For those with a high-deductible health insurance plan, that leaves very little room for error if the medical bills begin to pile up. A high deductible can leave only a few thousand available for out-of-pocket bills that, depending upon the ailment, can end up adding to the total cost.
Those without health insurance fare little better -- of the 56 million adults struggling with medical debt this year, 1.7 million of them are likely to file for bankruptcy as a result of that debt. These numbers are the result of an analysis of information provided by the U.S. Census, the Center for Disease Control, and a number of other sources.
While medical debt can be difficult to overcome, there is thankfully help for those who need it. A bankruptcy filing can help to reorganize those debts and even forgive some or all of them, depending on the details of the individual case. This can go a long way toward ensuring the fiscal -- not just physical -- health of a Michigan resident fighting an illness.
Source: cnbc.com, "Medical Bills Are the Biggest Cause of US Bankruptcies: Study," Dan Mangan, June 25, 2013