Generally, the decision to file for bankruptcy is never an easy one. Typically, consumers see bankruptcy as an option of last resort. Oftentimes, the final decision is a result of staggering medical bills which are often compounded by the loss of income due to health issues. While some studies show that nearly 50 percent of all bankruptcies are caused by something to do with health care issues, the bottom line is that medical debt often forces consumers to file bankruptcy.

Rising cost of care

While the Affordable Health Care Act (AHCA) was meant to address the high cost of health care, unfortunately, many economists feel that not enough was done to manage costs. Instead, the AHCA opens access to care up to millions who may not have been previously insured while doing little to reduce the overall cost of services provided. Low and middle-income families may still spend nearly as much on health care services as they spend for housing. Overall, the rising cost of health care impacts families of all sizes and chronic health issues such as diabetes may contribute to those costs.

COBRA often adds to the problem

In some cases, consumers report that job loss combined with high medical bills forced them into filing for bankruptcy relief. While most employers offer COBRA to those who are laid off from their jobs, the higher premiums often force families to risk being without coverage. A simple accident can devastate a families finances.

Unmanageable medical costs

Unfortunately, too often families who are faced with the need for ongoing medical treatments resort to using their credit cards or taking out home equity loans as a means of paying for treatment. While emergency care for specific health issues can be obtained at an emergency room, rehabilitation therapy, prescription drugs, and similar expenses are not available to those who cannot pay for them at the point of service. While it may be possible to manage some health care costs, there certainly costs that not only cannot be anticipated, they cannot be budgeted for either. Health costs for diabetes, for example, can run thousands of dollars annually for those without coverage forcing them to seek alternative ways of paying for care.

Credit cards and medical care

Unfortunately, once you have begun paying medical bills with credit cards you may be creating a financial trap that is nearly impossible to overcome. The more you depend on credit cards for medical payments, the more difficult it becomes to meet your monthly obligations. Using credit cards for medical payments is also extremely expensive since you will be paying interest. If this is the path you have already chosen, then, unfortunately, you may be forced into filing for bankruptcy protection.

Today, with the job market making a weak recovery, thousands of families may be facing the possibility of filing bankruptcy. Medical debt that you have incurred while being unemployed could force you into this decision unless health care providers are willing to negotiate with you for a long-term payment plan that is affordable. Consumers who find themselves buried under thousands of dollars in unpaid medical bills should contact an attorney who specializes in bankruptcy to help them look at all their options and determine if bankruptcy is the answer to their problems. While bankruptcy should always be considered a last resort, in the long-run, it may be the only solution.

Photo by The Eyes Of New York