Medical Bankruptcies Statistics


While France has virtually no healthcare-related bankruptcies, about half a million Americans file for bankruptcy every year because of medical bills. These and many more medical bankruptcies statistics reveal the shocking effect of the soaring US healthcare costs.

While there are medical bankruptcies in Europe, Canada and Australia as well, Americans still have it worse. Over 50% of Americans believe that they wouldn’t be able to deal with the costs of a major health issue. After all, the average medical bill for a hospital stay in the US costs $5,220 per day.

To learn more eye-opening facts and stats about medical bankruptcies by country and especially in the USA, keep reading. We will go beyond simple statistics and answer your most pressing questions too.

Medical Bankruptcies Statistics (Editor’s Choice)

  • Americans struggle the most with medical debt compared to people from other countries.
  • Every year 530,000 American families file for bankruptcy due to medical bills.
  • US medical bills and indebtedness are responsible for 66.5% of all American personal insolvencies.
  • On average, Americans spend about $10,000 a year on healthcare costs.
  • 66% of all medical debt in the US comes from one-time medical issues.
  • Most US citizens with medical debt owe between $2,500 and $5,000.

Global Medical Bills Bankruptcy Statistics

1. Medical bankruptcies in Canada are the most common among senior citizens.

While about 4.6% of Americans filed for personal bankruptcy in 2007, in Canada the percentage was higher at 5.3%. A share of those insolvencies was caused by outstanding medical bills or other medical reasons. Fraser Institute concluded that senior Canadians of at least 55 years struggle with medical indebtedness the most. Namely, 15% named medical reasons as the primary cause of insolvency.

(Fraser Institute)

2. Medical bankruptcy exists in the United Kingdom, even with the single-payer system.

Even though the United States leads in medical bankruptcies around the world, other countries have them too. Medical bills bankruptcy statistics from 2005 show that 8.2% of those that went bankrupt in the UK listed illness or a disability as the reason. An article by the National Center for Public Policy Research further shows that medical-related bankruptcy doesn’t always happen due to medical bills — serious medical conditions often affect people’s ability to work and generate income.

(National Center)

3. In 2008, there were no medical-related insolvencies in France.

An article by Stanford Medicine compares the US medical bankruptcy statistics with those of France. Their research highlights that in 2007, 62% of all US insolvencies resulted from medical costs. By contrast, in France, there were no medical-related bankruptcies in 2008. The main reason is the single-payer system that ensures everyone gets free healthcare. Stanford Medicine, however, highlights that taxation in France is much heavier than the one in the USA.

(Stanford Medicine)

4. Less than 10% of personal insolvencies in Australia are due to medical reasons.

In the fiscal year 2016-2017, Australia saw a total of 25,225 personal insolvencies, according to medical bankruptcies statistics. Among those, about 1,830 resulted from health conditions. Meaning, only 7.25% of all personal insolvencies are related to medical issues and/or debt. The two main reasons for personal bankruptcy in Australia in 2016-2017 were excessive credit use (8,870) and unemployment or loss of income (8,035).


5. In Germany, medical reasons aren’t included in the top five reasons for personal bankruptcies.

While most personal insolvencies in the United States result from medical reasons, in Germany, the situation is different. A CRIF Bürgel study on German medical bankruptcies statistics shows that the main reason for bankruptcy is reduced work. Overspending, family changes, or separation are the other leading causes. Diseases are listed as the last common insolvency reason, and mostly affect senior German citizens.

(CRIF Bürgel)

US Medical Debt and Bankruptcies

6. The total medical debt in the United States in 2020 totaled $45 billion.

A study by Credit Karma reveals that the total medical debt in the US was $45 billion. This information was based on the credit reports of over 20 million Americans. The same medical debt statistics established that medical debt rose 3% from the moment the COVID pandemic started until August 2020 when the research was conducted.

(USA Today)

7. Every year about 530,000 families file for bankruptcy due to healthcare bills.

For hundreds of thousands of American households, it is easier to file for bankruptcy than to deal with medical costs. Medical-related bankruptcies, according to a Nasdaq article, are killing the middle class in the USA. The author mentions other worrisome facts about medical debt like a Nobel laureate who paid healthcare bills by selling his medal. It also stated that over 250,000 people seek help to pay medical bills through the GoFundMe crowdfunding service.


8. Medical indebtedness is the number one cause of bankruptcies in the US.

About 62% of people highlight healthcare bills as the leading cause of bankruptcies in America. It’s more shocking to note that over three-fourths (78%) of those people had some type of insurance, medical bankruptcy statistics show. This number indicates that medical bankruptcies with insurance are a real thing in the USA.


9. Almost 20% of all consumer credit reports include one or more collections originating from healthcare.

About 19.4% of American consumer credit reports contain medical or healthcare-related collections. Regarding the composition of collections tradelines or credit reports by type of creditor, 52.1% are associated with healthcare providers. The median collections amount among creditors of this type is $579.


10. More than half of all Americans think medical treatments cause more problems instead of solving them.

Medical debt statistics reveal that 51% claimed that medical treatments create more problems due to their soaring costs. Meaning, even if the health issue is resolved, Americans are often left with huge bills and debt. About 48% said the value of medical treatments in the USA was worth it. In the same research, PRC established that 83% of the participants claimed that quality medical care was unaffordable.

(Pew Research Center)

11. Almost half of Americans worry that a major medical issue can lead to filing for bankruptcy.

About 45% of US citizens think they would go bankrupt if faced with a significant health issue, according to medical bankruptcies statistics. Still, a higher share (48%) believe that the USA has the best healthcare in the world. Consumer Affairs also discovered that over three-fourths (76%) of Americans believe that the medical costs in the country will keep rising.

(Consumer Affairs)

12. In March 2020, healthcare was the most serious issue for about 11% of Americans.

Despite the soaring costs of medical treatment in the United States, healthcare isn’t the most serious issue among Americans. Only 11% highlighted healthcare as their biggest concern in March 2020. Compared to the other months, however, it’s notable that more and more people worry about healthcare. Facts about medical debt show that only 5% highlighted this as the most serious issue in September 2019.

As for what worries Americans the most, 27% said the government and poor leadership. About 13% pointed out diseases and COVID-19 in particular as their primary concern. About 13% of the Gallup survey participants said that they worry about the economy, unemployment, and federal debt.


13. The percentage of American households that struggle with medical bills debt dropped by 6% between 2011 and 2018.

In 2011, about 20% of American families couldn’t afford to pay medical bills. The 2018 medical debt statistics show that this percentage decreased to 14% over the seven-year period. Still, the number of medical bankruptcies by year in the US has been roughly the same. The author points out that families that don’t struggle with healthcare bills have better financial health and quality of life. As for who is the most affected by medical debts, the article points to African Americans (21%), children (16%), and women (15%).

(U.S. News)

14. Americans spend an average of $10,000 on healthcare costs per year.

The average American medical bills per day are $5,220 and the average annual nursing home rates are about $97,450. These soaring expenses are the main reason why so many Americans file for medical-related bankruptcy. In 2019, people in the USA spent over $3.8 trillion on healthcare.

(Debt, Advisory)

15. Americans making under $50,000 a year struggle the most with medical debts.

This comes as no surprise as people with the lowest spending power are those most affected by unexpected medical bills. The KFF/NYT medical bankruptcy statistics reveal that 37% of those who make less than $50,000 struggle with medical bills debt. Among Americans who earn between $50,000-99,999, only 26% reported difficulties paying healthcare bills.

Finally, only 14% of those who make $100,000 or more struggle with healthcare debt in the US. So, the situation here is opposite to the one with credit card balances. Namely, the latest credit card debt statistics show that those making the most money owe the most in this type of debt.

(Kaiser Family Foundation/New York Times)

16. Medical bills bankruptcy statistics show that one-time events contribute to most medical bill problems among Americans.

A large percentage of bankruptcies due to medical bills result from one-time emergencies. About 66% said their medical debts came from a one-time or short-term medical expense. About 33% cited chronic illness as the reason behind their medical-related indebtedness, with diabetes and cancer the most common. Only 2% of the participants either didn’t know or refused to answer.

(Kaiser Family Foundation/New York Times)

17. Most Americans struggle with medical bills for their own healthcare expenses.

Medical debt statistics show that among the people who couldn’t pay their healthcare expenses, almost three-fourths dealt with their own bills. While 73% had personal medical expenses to worry about, 33% said they were struggling with medical costs for a spouse/partner. About 25% were parents dealing with high healthcare expenses for their child. Only 10% responded that their medical debts came from bills for other family members.

(Kaiser Family Foundation/New York Times)

18. Most Americans accrue debt from doctor visits and diagnostic tests.

About 65% of participants in the KFF/NYT study said that doctor visits were responsible for their debt. Medical bankruptcies statistics show that only 9% responded that doctor visits represented the largest share of medical bills they couldn’t pay. The situation was similar with diagnostic tests. Namely, 65% said they struggle to pay such medical bills, and 11% highlighted them as the largest share of problematic expenses.

Other notable mentions include lab fees (64%), emergency room (61%), and prescription drugs (51%). The list goes on with outpatient services (49%), hospitalization (49%), dental care (41%), and some other type of medical services (15%). Nursing home and long-term care are at the bottom with only 4%.

Facts about medical debt show that emergency room expenses (21%) and hospitalization (20%) represented the largest share of bills Americans couldn’t pay. About 13% also pointed to dental care as their primary source of medical indebtedness.

(Kaiser Family Foundation/New York Times)

19. The largest share of individual US medical debt was between $2,500 and $5,000.

About 24% of all participants with medical debts said the amount they owe falls within these thresholds. Around 19% and 18% owe $1,000-$2,500 and $5,000-$10,000 in medical bills, respectively. Healthcare indebtedness of $500-$1,000 and $10,000+ was an issue for 14% and 13% of the participants, according to medical bankruptcies statistics. Finally, only 10% said that their debt from medical bills was under $500.

(Kaiser Family Foundation/New York Times)

20. Getting healthcare from out-of-network providers is among the reasons for medical bankruptcy.

Namely, 69% of those who received care from out-of-network providers weren’t aware that the providers were out-of-network. Insurance companies always deny such claims later and refuse to cover the massive fees. This often leads to healthcare debt and even healthcare bankruptcies. Only 28% said they knew their healthcare providers were out-of-network.

(Kaiser Family Foundation/New York Times)

21. 58% of Americans with healthcare debt were contacted by a collection agency.

The latest medical bankruptcies statistics show that less than half (41%) said they weren’t contacted by a collector. Among those who were contacted, the main reason (25%) were unpaid medical bills. The situation was a bit more drastic among uninsured Americans, with 63% contacted by a collecting agency. For 22% of them, medical bills were the reason.

(Kaiser Family Foundation/New York Times)

22. 18% of those who had issues paying medical bills declared bankruptcy.

Among those, 2% have declared bankruptcy in the past 12 months, and 16% declared bankruptcy more than 12 months ago. About 3% responded that medical bills were the primary reason for their bankruptcy. US medical bill bankruptcy statistics show that more insured (21%) than uninsured (14%) Americans declared bankruptcy.

(Kaiser Family Foundation/New York Times)

23. 47% of people with healthcare debt in the US didn’t know if their medical care provider offered fee reduction programs.

Medical debt relief programs can help people avoid medical bankruptcies in America. Still, almost half of people struggling with medical bills weren’t aware of them and whether hospitals offered them. Only 27% responded positively. Among those, only 15% decided to enroll or sign up for a hospital fee reduction program.

(Kaiser Family Foundation/New York Times)

US Medical Debt and Insolvency by Demographics

24. 26% of Americans aged 18-64 struggle with paying their medical bills.

More than one-fourth of Americans struggle with healthcare costs, according to a recent study. The study’s medical debt statistics show that among the participants who reported issues paying their medical expenses, 53% were uninsured, and 20% were insured. Among those with private insurance, 26% had a high, and 15% had a low deductible. About 47% of the participants had a disability, while 22% had no disabilities.

(Kaiser Family Foundation/New York Times)

25. More women than men struggle with medical debt in the US.

Out of all female participants, about 29% said they were struggling with medical debt in the past 12 months. This compares to 23% for male participants. 

(Kaiser Family Foundation/New York Times)

26. Hispanic and African Americans are more affected by healthcare debt than White Americans.

The KFF/NYT medical bankruptcies statistics established that 32% of Hispanics and 31% of African Americans struggled with medical debt. Among White Americans, only 25% reported issues with paying medical bills. 

(Kaiser Family Foundation/New York Times)

27. The South Census Region in the United States struggles the most with healthcare debt.

Just under a third (32%) of the participants from this region cited difficulties paying their medical bills. Stats on medical bankruptcies by state show that Southern states have it the worst. The next most affected region is the West, with 26%. The Midwest and the Northeast are the Census Regions with the lowest rates of medical debt in the US. About 23% and 18% of the people admitted to dealing with medical-related indebtedness.

(Kaiser Family Foundation/New York Times)

Frequently Asked Questions

Who is responsible for the medical bills of an 18-year-old?

Individuals aged 18 or older are the responsible party for their healthcare costs. Parents have a right under the Affordable Care Act to keep adult children up to 26 on their policy. Still, the reform doesn’t require them to be the responsible party for unpaid medical bills.

When do medical bills go to collections?

Hospitals sell medical bills to collection agencies after a delinquency period of 90-180 days or more. Once placed in collections, you will receive a notification and an additional 180 days to pay them. Otherwise, you can expect medical bills on your credit report.

What percentage of bankruptcies are caused by medical bills?

About 66.5% of bankruptcies among Americans are associated with medical bills. Every year, about 530,000 families in the United States file for bankruptcy as a result of soaring healthcare costs. 

In addition to medical bills, which are insolvency factor number one, job loss, divorce, and poor money management are common bankruptcy reasons.

Is there interest on medical debt?

It depends on your contract. The Fair Debt Collection Practices Act (FDCPA) prevents collectors from charging interest rates and fees that weren’t included in the initial contract. If you agree to a repayment plan with your hospital, their policies will determine whether you pay interest or not.

Also, if you paid your debt off using your credit card or with a loan, both of these services include interest rates.

What percentage of hospital bills go unpaid?

In 2020, about 95% of hospital bills in the United States were fully or partially unpaid. More than two-thirds of American patients can’t afford to pay for health treatment. This percentage isn’t expected to drop in the years ahead unless there’s a drastic change in the US healthcare system.

How do you get medical debt forgiven?

You must file a request with the healthcare provider if you want your debt forgiven. Only applications that provide proof of verifiable hardship are approved. A verifiable hardship is any disability that prevents you from working and generating income. Some charities and nonprofits like CancerCare may help as well.

How long until medical debt is forgiven?

Data shows that after seven years, your healthcare debt won’t appear on your credit report anymore. Still, you have to pay for it. The only way to have medical bills forgiven is to petition the healthcare provider by providing proof for your hardship.

What happens if you cannot pay medical bills?

Unless you agree to a payment plan with the hospital, your medical bills will probably be sold to a collector. Collecting agencies can take you to court and then seize your assets to get their money back. If you have a hardship, you may be eligible for medical bill forgiveness.

Not many people are familiar with medical debt relief programs, including free clinics, governmental benefits, state-sponsored programs, charities, and health care centers. Many of these provide assistance with medical bills debt for eligible Americans. So, before applying for a payday loan or generating credit card debt, check your eligibility with such programs.

Do medical bills have a statute of limitations?

Medical bills debt is just like all other types of debt and, therefore, the standard statute of limitations applies. This means it can be removed in between three and six years. Since each state has individual regulations, it’s vital to discover which ones apply to you.

Can I lose my home over medical bills?

Yes. If a hospital or a collector takes you to court and wins, they gain the right to seize your assets. There is another, indirect route, to losing your home. This happens when you are no longer able to cover mortgage payments because of medical bills.

Depending on where you live and how much you owe, your home may be in real danger. If you have no other assets, they will file a lien against it. Unless you cover your debt, you won’t be able to sell the estate without having the lien removed first.

The second scenario is more manageable since you can always sell the house and downsize. 

How do I protect my assets from medical debt?

There are several options here. First, you can secure a Health Savings Account Qualified (HSA) medical plan. Another option is to fund the tax-deductible HAS as much as the law allows it. A Long Term Care (LTC) policy shouldn’t be overlooked either. Finally, consider buying a critical illness product.

Another idea is to put money aside for health emergencies. Even though this is rarely a priority to healthy people, it pays off when something unexpected hits. After all, almost 48% of mortgage foreclosures in the USA are related to health and income.

Does medical debt affect credit score?

It depends. Medical debt isn’t one of the credit score factors unless the hospital turns it over to a collection agency. Collection agencies often report debts to credit bureaus, which negatively affects your rating. Beware that each collection on your report can lower your score by up to 100 points.


These medical bankruptcies statistics show that everyone should put money aside for health emergencies. Anyone who wants to avoid medical indebtedness and healthcare related bankruptcies should ensure they can handle surprise medical bills. With the average medical bills in the US standing around $10,000, this figure should be your target for a rainy-day fund.

References: Fraser Institute, National Center, Stanford Medicine, AFSA, CRIF Bürgel, USA Today, Nasdaq, Investopedia, CFPB, Pew Research Center, Consumer Affairs, Gallup, U.S. News, Debt, Advisory, Kaiser Family Foundation/New York Times

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