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Medical debt for cancer treatment can lead to bankruptcy, study finds

Medical debt for cancer treatment can lead to bankruptcy, study finds

Medical debt is often dischargeable in bankruptcy.

Medical advances have resulted in a number of treatment options that can help patients manage cancer. These treatments can include surgery, chemotherapy and radiation among others. Regardless of the chosen method, one thing is true about most forms of treatment: they are expensive. Even with insurance coverage a patient can be left with large medical bills. These bills can be difficult to manage and, according to a recent study, can result in bankruptcy.

Fox News Health discussed the study, noting cancer therapy can cost a patient from $10,000 to $60,000 every month. The study is available through the National Library of Medicine, titled For Working-Age Cancer Survivors, Medical Debt and Bankruptcy Create Financial Hardships . According to researchers, one-third of the 4,719 reviewed cancer survivors, ranging in age from 18 to 64, went into debt as a result of the cost of their cancer treatment. 55 percent of these survivors reported owing at least $10,000.

Dealing with medical debt: Bankruptcy as an option

For those struggling with medical debt, bankruptcy may be an option for a fresh financial start. Two of the common forms of bankruptcy used by individuals are Chapter 7 and Chapter 13. Regardless of the chapter chosen, once a petition for relief through bankruptcy is approved the court issues an automatic stay. This court order requires creditors to cease in their attempts to receive payment. This includes wage garnishments, lawsuits, calls and other forms of contact by creditors.

Considering bankruptcy: These chapters provide relief

Those who are considering bankruptcy can benefit from a basic understanding of these two chapters:

  • Chapter 7 . This form of bankruptcy is also referred to as liquidation. It involves the gathering of certain qualifying assets that are used to settle debts. Debts that remain after this process is complete are generally discharged, meaning the petitioner is no longer responsible for payment. Medical debt generally qualifies and can be forgiven through this process. It is also important to note that certain pieces of property can be exempt from this process; in some cases this can include a family home.
  • Chapter 13 . This is also known as the reorganization form of bankruptcy. It allows for the development of a repayment plan. This plan is designed to be more manageable then current financial obligations, often spanning between three to five years and monitored by the court.

Determining whether or not bankruptcy is the right option for you can be difficult. As a result, it is wise to seek the counsel of an experienced bankruptcy lawyer.

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