Study: American Women Are Especially Taxed By Medical Bills

Due to the worst economy since the Great Depression, more people than ever either are out of work or are being forced into lower-paying jobs. It is therefore little surprise that more Americans are finding it more difficult to pay their bills. Some of the most common financial obligations that Americans are having difficulties meeting are medical bills and other healthcare costs.

One recent study by the Commonwealth Fund says that American women, even if they are insured, are having more trouble paying for medical care than women from other countries. According to the study, about a quarter of American women between the ages of 19 and 64 years had medical bill problems, compared with 12 percent of French women and four percent of German women. In addition, only half of American women said that they could confidently afford care if they became seriously ill.

The study went on to say that 18.7 million U.S. women did not have insurance in 2010 and an additional 16.7 million were underinsured-or were at risk of high out-of-pocket costs given their income.

Given the situation regarding U.S. women and the fact that nearly one in five families are having trouble paying off their medical expenses, it is no surprise that 25 percent of Americans are considering filing for bankruptcy . For many people struggling with medical bills, bankruptcy can provide the solution to their seemingly hopeless financial situation.

Bankruptcy and medical bills

Medical bills can be discharged in bankruptcy, providing a fresh start for those overtaxed by medical bills . Typically, individuals can file two types of bankruptcy: chapter 7 and chapter 13.

During a chapter 7 bankruptcy, a trustee sells all property of the debtor that is not exempt by law to pay the debtor’s creditors. Once the sale has been completed, the debtor receives a full discharge of many types of non-secured debt, including medical bills. With a few exceptions, once the discharge is granted, the debtor is under no obligation to pay the debt that was not paid in full by the sale.

It is not true that a debtor loses all of his or her property in a chapter 7 bankruptcy. Many of the debtor’s important possessions, such as a house, car, furniture and other personal items are exempt from the sale by law and cannot be sold to satisfy debts.

For a debtor who has regular income, chapter 13 bankruptcy might be a better option. This type of bankruptcy allows the debtor to reorganize his or her debt and repay all or a portion of it interest free under a repayment plan. The debtor keeps all of his or her property as the payments are being made.

As the repayment plan is based on what the debtor can afford and can stretch repayment of the debt for as long as a five-year period, it can make even overwhelming medical debt affordable. Once the debtor completes payments under the plan, he or she receives a discharge and does not have to pay back any debts that are not covered or are only partially covered by the plan.  Contact us at (303) 438-8477.

How Can We Help?

We encourage you to contact us if you have questions concerning bankruptcy, family law, probate or tax law. Attorney Harold Faletti is available to provide personalized attention and address your concerns.