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Discharging medical debt with Chapter 7 bankruptcy

The Affordable Care Act was created to relieve many families, including those in Appleton, Wisconsin, from the increasing and expensive costs of health care. Unfortunately, even those people who have health insurance experience financial challenges and worries caused by medical debt.

For example, a woman who works two full time jobs accumulated piles of medical bills after she was hospitalized earlier this year. The total amount of those bills is over $26,000. She had undergone kidney stone surgeries and has been battling kidney disease for 32 years. The woman reportedly had cancer and knee injury as well and frequently visits her doctor. Unfortunately, every visit and every treatment means more unpaid medical bills.

Although she is covered through her husband's employment health insurance, the out-of-pocket costs may cause a financial burden, considering that it may increase next year along with higher premiums. The insurance only covered a portion of her prescription drug costs and she still had to pay hundreds of dollars for medications.

The woman's story is just one of the stories of Americans falling under the poverty level because of health care costs. Thirty-two percent of people with high medical debt or bills have used up all their savings to repay the debt, while some are postponing paying off household expenses, vacations and even food.

Financial challenges brought about by health care expenses affect not only the health condition of the patient but also the person's normal way of life. Fortunately, Wisconsin residents struggling with medical debts have the option to file Chapter 7 bankruptcy. Chapter 7 bankruptcy may allow the person to discharge personal debt, ranging from credit card debt to payday loans to unpaid medical bills. It may free a person from the worries of not paying the debt on time in addition to releasing him or her from the financial burden.

Source: Sioux City Journal, "Medical costs lead to financial worries," Nick Hytrek, Dec. 22, 2013

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