Most of the people in California and around the country who file personal bankruptcies each year do so because of medical debt, and many of them found themselves overwhelmed by bills despite having health insurance. Common reasons for hospital and doctor bills not being covered include getting treatment from out-of-network providers and visiting a specialist without first getting a referral from an in-network physician. Health insurance companies usually have fierce cost-control measures in place, and they often look for ways to deny claims.

Inflated or inaccurate health care bills are another common cause of soaring medical debt. Diagnostic codes and other medical jargon can make these documents difficult to understand for consumers, but health insurance companies have experts to pore over them and identify overcharging and treatment that was not actually provided. Patients can file appeals when their claims are denied, but the process is complex and offers no guarantee of a successful outcome.

Patients who are paying for their treatment directly rather than relying on health insurance may be able to negotiate with medical providers, but few patients are aware of this, and those that are may be uncomfortable asking doctors and hospitals for a better deal. Patients often turn to credit cards and hospital payment plans to cover unexpected medical costs. While these options allow doctor and hospital bills to be paid over time, they also add interest charges, and the fees for late payments can be high.

People struggling to pay medical bills are often reluctant to file for bankruptcy because lenders have worked hard to stigmatize debt relief. The bankruptcy laws were drafted to provide second chances, and many Americans have taken advantage of the fresh start they offer. Attorneys with experience in this area may explain what a Chapter 7 or Chapter 13 filing involves and how pursuing personal bankruptcy puts a swift end to creditor harassment.