Medical Bankruptcy Statistics Aren't Getting Better

Medical bankruptcy hasn’t been difficult to diagnose, as I’ve remarked before in these blogs. Every calendar quarter, the administrative office of the U.S. Courts compiles statistics, and recent statistics haven’t been very rosy, with Chapter 7 bankruptcy filings up 43% and business bankruptcies up 54%. Medical debt is behind more than half these numbers, according to many sources. This is, unfortunately, not new. From 1981 – 2000 alone, medical bankruptcies increased 2200%!

When it comes to individual bankruptcy in Indiana, IndianaGazette.com reports, without health care”, many are “one burger from ruin.”

As a bankruptcy attorney in Indiana, I’m seeing more and more medical debt. To make matters worse, I’m hearing the horror stories much, much too late in the process. I can’t stress enough how important it is for anyone with medical debt to talk with an attorney as quickly as possible. Medical providers, as I’ve explained before, rarely turn debts over to credit bureaus. Instead, they turn them over – often within a very short period of time – to debt collection agencies.

In the Indianagazette.com story, for example, two days after the patient was released from the hospital, collectors were calling, insisting she begin to make payments on the $27,000 bill for her week’s hospital stay. With legal representation, you at least have a better chance to negotiate payment arrangements. Then, too, bankruptcy itself stops collection efforts entirely and buys time to do some planning.