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Do small medical bills contribute to Chapter 7 bankruptcy?

Getting medical care for an illness or injury is often necessary, but expensive. Many people in California still pay significant out-of-pocket costs even when they have insurance. Although these debts may be relatively small -- sometimes as little as a couple hundred dollars -- they can still leave people in difficult financial straits. In some cases, Chapter 7 bankruptcy may be necessary for debtors to truly achieve relief from their debts.  

Some patients may believe that hospitals or doctors will not worry about sending small debts to collections, but this is not the case. A study of four million credit reports from 2016 found that approximately 2 percent of all adults in America had a health care bill that was less than $200 handed over to a collections agency. More than half of 2016's medical collections were not for large debts either, and constituted bills under $600. 

This study reveals two very important things -- that hospitals will vigorously seek repayment for small bills, and that many people are struggling to repay minor amounts of debt. Although it is usually common knowledge that major medical disasters can place financial strain on patients, lots of people cannot even afford the basic costs of regular care. Patients in their late 20s are hit hardest by these small bills, too. This is likely because the older a person is, the better the health insurance coverage tends to be. This is especially true for people in their 60s who are qualified for Medicare coverage. 

Not everyone struggling with debt is doing so because of poor spending habits or unexpected bills. Indeed, many people in California are in difficult financial times because of the slow accumulation of lots of smaller bills that eventually became simply too much to handle. Regardless of how a person found him or herself unable to overcome their bills, Chapter 7 bankruptcy can help to discharge the debts and create a better, more financially secure future. 

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