We often see statistics on Bankruptcy filings reported in newspapers, especially in Georgia since we are usually in the top 2 or 3 states in number of annual personal Bankruptcy cases filed.  Looking behind the numbers, what exactly causes people to have to file a Bankruptcy Petition?  The reasons may or may not surprise you.  According to a NerdWallet Health study, the number one cause of personal Bankruptcy filings is not running up credit cards, home loan defaults, job loss or crippling student loans.  It is medical debt (sometimes referred to as “Medical Bankruptcies”).  Medical Bankruptcy cases include overwhelming medical bills (even for those who have insurance), the loss of income due to health problems, and defaults on loans taken out to pay medical bills. Hundreds of thousands of others will have financial problems due to medical bills, even if they do not have to file for Bankruptcy.   This series of charts from Ragan’s Health Care Communication News is very informative.

It is certainly true that many people have to file for Bankruptcy because of poor spending habits or unwise decisions, but the reality is that most people are forced into Bankruptcy through medical bills, job loss and other reasons beyond their control.