In reviewing my case with a Michigan bankruptcy attorney I was shocked to find that some of the leading causes of bankruptcy comes from people that have too much medical debt and they are being sued and then having their wages garnished because they can not pay for all the health care they have received. Even more surprising is several of these people had health care insurance. The problem with medical debt and bankruptcy is that you are pretty much at the whim of the courts when it comes to listing your assets such as equity.
Medical debts and assets
It is not uncommon for people to have significant assets such as equity in a home or other income property and then they have to file bankruptcy which requires them to sell their home just so that all the additional equity in the home can be turned over to pay for medical debts. This would be due to filing bankruptcy over medical debts. It would not be uncommon for a trustee to make them sell their home when they have filed for bankruptcy. This does not really seem quite fair since we have little control over something significant happening to us medically.
This is where the problem comes into place with bankruptcy as related to medical debts. There should be certain protections put into place to prevent the courts from making you sell your home to satisfy medical debt. It is inevitable that you will get old and you will eventually have to go to the hospital. Therefore, since there is no way around this the bankruptcy laws should be changed to protect homes where people live. I am not talking about some rich person having multiple homes and owing a hospital a lot of money. If this person owes the hospital lost of money they can sell their other homes or investment property as long as their home is protected. This is why we need to include more bankruptcy exemptions to protect elderly and the people who get very sick.
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