Colorado foreclosures down, but medical debt causing more financial hardship

When an individual becomes overwhelmed with debt, there are often a number of underlying issues. While there may be many factors in the financial equation that leads to burdensome debt, often, there is a single exacerbating concern that pushes people over the edge into real trouble. In Northern Colorado and across the nation, for many years this primary concern entailed sinking home values coupled with crippling mortgage payments.

However, there are indications that the housing market is finally in the midst of a robust recovery. The Colorado Division of Housing recently released a report showing that in 2013, foreclosure sales in Colorado were down 41.4 percent from the previous year and had reached their lowest level since 2004. Weld County, which had previously led the state in foreclosures, saw the lowest number of foreclosure sales within its borders since 2001. Larimer County also outpaced the statewide foreclosure recovery, with a 47.2 percent drop in foreclosure sales last year. Greeley median home values hit $170,000, the highest ever.

Of course, just because foreclosures were generally down in Colorado last year does not mean everyone is out of the woods yet: according to RealtyTrac, a company that monitors foreclosure filings, Colorado's foreclosure filing rate spiked by 89 percent from December to January. Despite the large one-month increase, the January foreclosure filing rate was still down by 24 percent compared to January of 2013.

Widespread troubles based on the housing market seem to be receding as a threat to household finances in Colorado. But, a new problem is quickly rising up to take their place.

A 2013 study conducted by NerdWallet Health found that oppressive medical bills are soon expected to surpass credit card and mortgage debt to become the top cause of bankruptcy filings.

Bankruptcy brought on by medical debt is not just for the uninsured. For one thing, health insurance policies often have large deductibles. In addition, for many patients, it is not just the treatment bills that strain their finances when a medical crisis arises. For example, patients in recovery may be unable to work and collect wages or might have to hire outside help to pick up the slack on household tasks. In a FOX Business interview, co-founder of fundraising service GiveForward Ethan Austin stated that 78 percent of people who file for bankruptcy due to medical debt had health insurance.

The good news about medical debt is that it is fairly easily discharged in bankruptcy. Medical debt is generally unsecured, meaning that unlike a home mortgage, the money you owe for a medical bill is not tied to some physical asset.

While the housing market is in recovery in Northern Colorado, many consumers are still struggling financially. If it feels like you are drowning in debt due to medical bills or for any other reason, bankruptcy could be the solution - and the truth about bankruptcy is more painless than you may imagine. To find out what bankruptcy can do for you, get in touch with a Northern Colorado bankruptcy attorney today.