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Bankruptcy an option for those with medical debt

| Feb 8, 2012 | Personal Bankruptcy |

Unfortunately, many New Jersey residents know all too well that a catastrophic illness brings more than just medical hardship for individuals and their families. First, the serious illness itself must be confronted just to stay alive. But the second part of the equation is the financial turmoil the illness creates, often wiping out personal savings to the extent that there is not enough money to maintain vital medical insurance. And the sad fact is that many do not even have sufficient insurance coverage in the first place. The result is that the inevitable mounting medical debt has forced people who are already suffering through no fault of their own to file for bankruptcy protection, often while they are struggling to defeat the disease that befell them.

The national health care reform act enacted in 2010 was designed to address part of this problem, but many of the provisions have not yet taken place, leaving people like one 59-year-old Dumont resident at a loss as to what to do.

The New Jersey woman was diagnosed with lung cancer last June. She felt fortunate that she had a good job and health insurance, but quickly learned it was not going to be sufficient to cover her rapidly escalating medical costs. Out from work on disability, she soon realized she would not be able to afford the costs for treatment, even with her insurance policy. To make matters worse, just nine days before Christmas she was fired from her job, the letter from her employer explaining that they could no longer keep her position open.

The simple fact is that hospitals and doctors expect to be paid for their services. When they are not, credit bureaus are notified. The resulting stain on one’s credit report can affect them for years. In a country already reeling from the impact of the great recession, those suffering medical calamity discover that beating a serious illness may leave them broke. Fortunately, bankruptcy protection can offer hope for those saddled with debt to forge a path to a fresh start, both financially and physically.

Source: North Jersey dot com, “Medical debt puts more at risk,” Lindy Washburn, Jan. 21, 2012

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