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Chapter 13 bankruptcy possible option for medical debt
Shepherd Best of Milwaukee 2013

Medical bills are a driving factor behind bankruptcies filings across Wisconsin and the rest of the country. NerdWallet Health's 2013 study showed that unpaid medical bills may, in fact, soon be the number one cause of bankruptcies, edging out bankruptcies filed because of mortgage or credit card debt.

It's a common misconception that medical bankruptcy is only an issue for people who do not have insurance; however, 78 percent of people who file medical bankruptcy have insurance. One of the contributing factors is everything else that goes along with high medical expenses. The co-founder of GiveForward explains that even if a person has insurance, there are additional costs. These can include time that has to be taken off of work, increased child care expenses and even things like increased fuel costs from driving back and forth to appointments.

Add those factors to high deductibles and copays -- which are quickly becoming the norm -- and it's a perfect storm. Filing for bankruptcy to discharge overwhelming medical debt can help, but it's a good idea to make sure that any negative financial habits that have contributed are also dealt with so that the person doesn't end up in the same situation again years down the road.

There are a couple of different bankruptcy options, including a Chapter 13 filing, for those with overwhelming medical debt. A Chapter 13 bankruptcy allows for debt reorganization so the person can start making payments. Filing for bankruptcy, however, can have long-term effects on credit history, so it's important to understand the entire process before starting filing procedures.

Source: FOX Business, "Medical bankruptcies are still a problem, here's what to expect" Donna Fuscaldo, Feb. 18, 2014

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