The problem of medical expenses in the U.S. economy has been gradually (and sometimes not so gradually) increasing over the past 50 years.
In recent years, that growth has accelerated to the point that in 2003, medical costs made up more than 15% of the U.S. Gross Domestic Product (GDP). If we continue as expected, that percentage could grow to approximately 33% by 2040.
Medical Bills Are Often a Key Cause of Bankruptcy
People who’ve experienced an illness or injury and found themselves buried in bills (even if they have health insurance) may consider >filing bankruptcy as a way to get out of debt.
There are two main types of personal bankruptcy: Chapter 7 bankruptcy (debt discharge) and Chapter 13 bankruptcy (debt repayment plan).
Chapter 7 bankruptcy involves the debt discharge, which eliminates unsecured debts, which are debts not tied to property, such as medical bills, credit cards, utility bills and some personal loans.
A Chapter 13 bankruptcy filing is a little different, because it involves setting up the filer on an interest-free debt repayment plan. This is generally best for people who have unsecured debt and secured debt, which is debt tied to property, such as a mortgage, that they want to keep. Chapter 13 bankruptcy has helped millions stop foreclosure, repay their debts and stay in their homes.
When you or a loved one is injured or ill, what’s important is focusing on getting better–not worrying about excessive medical bills.