Are You One Injury Away From Bankruptcy?
If you have a serious injury or illness you are likely to rack a up a large amount of debt and possibly face a reduction or loss of income. This is a financial combination that usually ends in filing bankruptcy.
In fact, medical bills and illness is the leading cause contributing to bankruptcy filings according to a study published in Health Affairs . The study, conducted by researchers at Harvard Law School and Harvard Medical School, found that medical problems contributed to about half of all bankruptcies. The author of the study, Dr. David Himmelstein commented: “Unless you’re Bill Gates you’re just one serious illness away from bankruptcy. Most of the medically bankrupt were average Americans who happened to get sick.”
If you are unfortunate enough to incur major medical bills, you can quickly find yourself in huge amounts of debt in a very short period of time, especially if you are one of the 44.8 million Americans who doesn’t have health insurance.
Things aren’t necessarily much better even if you do have health insurance! The study reported that most people who filed bankruptcy because of medical problems actually had health insurance. Uncovered medical debt averaged $13,460 for individuals with private insurance at the start of thier illness. The combination of high deductibles, co-pays, and exclusions can quickly reduce the amount coverage your insurer will provide. Without the ability to perform the same jobs, many also see a dramatic reduction in income.
This study highlights the fact that bankruptcy is designed for unfortunate individuals who have no realistic way of ever paying off their debt and truly need a fresh start.