While there are many different reasons people file for bankruptcy, medical debt is one of the most common causes. People often cite outstanding medical bills as part of the reason why they need to use Chapter 7 or Chapter 13 bankruptcy, depending on whether they want to liquidate assets and pay creditors or consolidate their debt into a repayment plan.
That being said, people sometimes believe that having health insurance can prevent a medical bankruptcy. As long as they have an insurance policy, they assume the insurance company will cover their medical bills. It is important to note that even having insurance does not guarantee that you will avoid significant medical debt.
Out-of-network services
For instance, there can sometimes be issues with where you receive medical care. Insurance providers have certain networks that they use, and they will only cover in-network services. So if you receive out-of-network services, they may deny your claim.
But in an emergency scenario, you may not take the time to consider which local medical care providers are in your insurance company’s network. If you are rushed to the hospital after a car accident, you are naturally just going to accept the care that you need to help with your recovery. But your insurance company may later say that it will not cover those bills.
Plus, even when the insurance policy does cover some of your major costs, certain services could be excluded or you may still have to meet your deductible. This alone can add thousands of dollars in medical expenses.
Your bankruptcy options
If you do find yourself facing medical debt, it can often feel overwhelming as you look into your options. Be sure to consider bankruptcy and determine if it can help you create a more positive financial future.
