Some Virginians are under extreme financial strain now in light of the COVID-19 crisis. One of the types of debt that they hold that could push them into bankruptcy is medical debt. Across the United States, nearly one-third of Americans are in medical debt, and half of these people end up defaulting on this debt.
People do not choose to end up in medical debt, but the consequences of it are no better than any other type of debt. Medical debt often ends up being crushing because of its size, imposing a large debt burden that can even be more than a person makes in an entire year. Unlike credit cards, there is no limit on the amount of medical debt that someone can incur because it often results from an unplanned emergency.
The fact that people have health insurance is surprisingly ineffective at preventing medical debt. Deductibles under most plans have shot up, and even premiums have increased. The average American is spending more than ever on health care costs, and it is causing them to rack up debt at an alarming rate in an amount that many people could never afford to pay back. When medical debt is paired with a crisis, many Americans face financial distress.
Medical debt can be discharged in a Chapter 7 bankruptcy proceeding, meaning that it goes away in its entirety when the debtor emerges from bankruptcy. In times like this, bankruptcy filings increase exponentially as many Americans live one paycheck away from the edge. A bankruptcy attorney may advise clients on the different steps of the procedure and help take some of the mystery out of a bankruptcy filing. The country's laws still protect debtors from oppressive medical debt and give them a way to deal with it.