Could COVID-19 lead to more bankruptcies?

Medical bills are already a debilitating burden for many Americans. An estimated two-thirds of all bankruptcies are due to medical reasons – either high costs for care or work time missed – according to CNBC. What’s more, every year more than half a million families file bankruptcy because of medical issues.

While these figures are staggering, they could grow. Some experts speculate the rapid spread of COVID-19 might spur even more bankruptcy action.

The costs of testing for COVID-19

In the U.S., getting tested for COVID-19 – also referred to as the 2019 novel coronavirus – through the Centers for Disease Control and Prevention (CDC) is free. It is not billing patients for testing, according to a story from Business Insider.

While testing might not cost a patient anything, everything else could come with a price tag. That includes any related tests, an ER visit, a hospital stay and other potential charges – even if a COVID-19 test comes back negative. Those without health insurance will likely face a higher bill. But due to the complexity of insurance billing rules, those with health coverage could still rack up debts totaling thousands of dollars.

Combine these sums with the possibility of having to take unpaid time off of work, and your financial situation can quickly spiral.

Bankruptcy may provide some relief

Anyone facing a financial dead end due to medical debts (whether related to COVID-19 or not) should know there are avenues for relief. Through Chapter 7 or Chapter 13 bankruptcy, you may be able to eliminate or significantly reduce those debts.

Filing bankruptcy, when done correctly, can help lift some of the weight off of your shoulders, giving you an opportunity to move on without being dragged down.