People often believe that bankruptcy is used by frivolous individuals who have lived beyond their means, and now want an easy out. Sadly, the truth is that a large number of bankruptcies are due to various catastrophes hitting people and leaving them with no way out.
Medical debt is a leading cause of bankruptcy. Even those with medical insurance can find themselves overwhelmed by the costs of being sick in this country. It often is accompanied by job loss, when an individual is hurt or becomes ill, cannot work and is fired. That typically leaves them without insurance or income to pay the mounting pile of medical debt.
John Oliver, of HBO’s Last Week Tonight, highlighted one problem faced by those buried by these medical debts. Their debts can be sold and sold again, to businesses that engage in debt collection of seriously delinquent debt, which may even be legally uncollectable, due to the statute of limitations having run on the debt. But that doesn’t stop some of them.
Oliver’s show was able to purchase $15 million dollars of this debt for $60,000. He then turned it over to a charity that discharges those debts, to prevent one of the many unscrupulous and unsavory bill collectors that operate in this market from obtaining the debt and harassing the borrowers.
Medical debt is a type of debt that can be effectively discharged in a Chapter 7 or a Chapter 13 bankruptcy. A bankruptcy attorney can help you determine which bankruptcy is right for you. If you have completed a bankruptcy and find you are being contacted by a debt collector on a discharged debt, you may need to speak with your attorney and determine if sanctions against the debt collector are appropriate.
Source: theatlantic.com, “John Oliver’s $15 Million Debt Giveaway,” J.Weston Phippen, June 6, 2016