When debts are mounting and cash flow can't keep up with them, it may seem difficult to envision a positive financial future. Bankruptcy may seem like a dirty word connected with failure, but the declaration can be the beginning of a new era for people in debt.
Ohio is a state in which it is often attractive to declare bankruptcy. The Buckeye State suffered heavily during the housing finance crisis of the century's first decade, and unemployment remains a serious concern in the region due to deindustrialization.
Medical bills are a significant contributor to debt, as people with chronic conditions or permanent disabilities may be forced to spend more money than they can earn. A lack of health insurance can exacerbate this problem, making it around 50 percent more likely to declare bankruptcy due to medical bills than insured individuals.
Excessive medical expenses cause at least one in 25 personal bankruptcies, according to a new study. This excludes several mitigating factors, such as home health care for elderly people or unexpected expenses connected to childbirth. These factors may make bankruptcy more likely, as they also expand debt.
Debt may also be triggered by medical problems and later expand to include mortgage payments, personal expenses and other debts that are difficult to pay back. Recently, research on bankruptcies theorized a "chain of struggles with medical expenses and medical debt" that leads to bankruptcy.
Bankruptcy can be filed by any eligible person, although legal representation is often recommended. An attorney may help a bankruptcy filer increase his or her chances of achieving his or her goals.
Source: Akron Beacon Journal, "Study: Medical bankruptcies may not be as common as thought," Tom Murphy, March 24, 2018