What is it that leads someone into filing bankruptcy? Bad spending habits? Recklessness? Credit cards? Wrong.

In 2013 the foundation NerdWallet published a report stating that medical bills were the primary cause of bankruptcy filings. The report estimates that 3 out of 5 bankruptcies are precipitated by collection from unpaid medical bills. After analyzing data from the U.S. Census it found the following conclusions:

• 56M Americans under age 65 will have trouble paying medical bills
  – Over 35M American adults (ages 19-64) will be contacted by collections agencies for unpaid medical bills
  – Nearly 17M American adults (ages 19-64) will receive a lower credit rating on account of their high medical bills
  – Over 15M American adults (ages 19-64) will use up all their savings to pay medical bills
  – Over 11M American adults (ages 19-64) will take on credit card debt to pay off their hospital bills
  – Nearly 10M American adults (ages 19-64) will be unable to pay for basic necessities like rent, food, and heat due to their medical bills
• Over 16M children live in households struggling with medical bills
• Despite having year-round insurance coverage, 10M insured Americans ages 19-64 will face bills they are unable to pay
• 1.7M Americans live in households that will declare bankruptcy due to their inability to pay their medical bills
  – Three states will account for over one-quarter of those living in medical-related bankruptcy: California (248,002), Illinois (113,524), and Florida (99,780)
• To save costs, over 25M adults (ages 19-64) will not take their prescription drugs as indicated, including skipping doses, taking less medicine than prescribed or delaying a refill

Christina LaMontagne, VP of Health at NerdWallet states that “In 2013 over 20% of American adults are struggling to pay their medical bills, and three in five bankruptcies will be due to medical bills. While we are quick to blame debt on poor savings and bad spending habits, our study emphasizes the burden of health costs causing widespread indebtedness. Medical bills can completely overwhelm a family when illness strikes,”

Some Americans even skip doses of medication to make their prescriptions last longer to save money.

Americans are quick to stigmatize those that file bankruptcy as deadbeats or as people who are not living within their means. I deal with people are facing financial catastrophe on a daily basis. Very rarely do I see someone who was completely reckless in their spending and only wants to file bankruptcy to screw over their creditors.  Most of the time- people have faced extreme medical hardship- which has then led to a loss of a job or income. I’m not sure anyone would be able to make it financially if the medical problem was large enough.

If you, or someone you know, is facing bill collectors from medical bills, call today for a free consultation to see if bankruptcy is the right choice for you. (801) 781-2026.