Many Americans face mounting credit card debt. However, out-of-control consumer spending is not the primary factor that drives families into bankruptcy.  Instead, the American Journal of Medicine has reported that more than 60% of bankruptcies in the United States were filed due to crippling medical bills. What may surprise you is that many of these individuals and families filing for bankruptcy had medical insurance. However, their out-of-pocket expenses, deductibles and uncovered services still managed to overwhelm them.

Filing for bankruptcy gives you an automatic stay on legal actions against you and property for debt collection, such as foreclosure, utility disconnections or wage garnishments. Depending on your circumstances, you may file for Chapter 7 bankruptcy and have some of your debt discharged, or file for Chapter 13 bankruptcy and pay off your debt (partially or in whole) over time. While certain debts cannot be discharged in bankruptcy, credit card and medical bills may be eligible for discharge.

As with other aspects of bankruptcy, read carefully and consider your situation; for specific questions about your particular situation, see an attorney before filing.