Bankruptcy has such a negative connotation in American society. The stereotype of someone who files tends to be a big spender with no restraint, from shopaholics to gamblers. In other cases, people may assume it is an owner whose business has failed. While these scenarios most certainly exist, they do not apply to most bankruptcies.

The leading cause seems to be medical bills. The exact numbers are debatable, reveals the Washington Post, but there is no denying the significant role health issues play in the decision to file for bankruptcy.

Why health problems are so financially straining

The assumption is usually that a medical emergency or long-term care resulted in enormous bills a person cannot pay. This is one factor, but it is not the main one. In fact, insurance changes through Obamacare did not help to reduce medical-related bankruptcies as hoped.

The bigger reason is that health care affects employment. Those who experience an injury or illness are unable to work. Thus, they lose the income needed to pay for their care. Or, the person has to quit working to take care of someone with medical needs. Either way, all bills quickly add up, leading to a financial situation that warrants bankruptcy.

There is a way out

If you face such circumstances, bankruptcy can help. It is not your fault this has happened to you, and you can take steps to turn things around.

You have two filing options: Chapter 7 and Chapter 13. Which one is right for you depends on how much money you make and what assets you have and want to protect. Chapter 7 is only for those who pass a means test, as this route eliminates most debt. Chapter 13 involves a plan for repaying some of the debt you owe. There are pros and cons to each type, but the results will be the same: A chance to start over.