Some Kentucky residents who file for bankruptcy might do so because of medical debt. In 2014, about 40 percent of all Americans incurred medical debt, and it is the main reason that people file for bankruptcy. The Kaiser Family Foundation reports that about one-quarter of adults in the United States are struggling with medical bills.

Many of the people having trouble with medical debt have health insurance. In 2016, the New York Times said that in the previous year, 20 percent of people younger than 65 who also had health insurance struggled to pay medical bills. Among those struggling, almost two-thirds said they had depleted their savings paying for health care and more than 40 percent reported taking on another job.

Having a savings account may help protect against medical emergencies and other situations that could lead to debt. To manage debt, a person might reduce spending by moving to a smaller home or cutting non-essential living expenses.

However, there are situations that may not be covered by careful spending and budgeting. The costs of health care may quickly outstrip a person's savings. Other unexpected life events, such as job loss or divorce, might also leave a person with debt. People might file for Chapter 7 or Chapter 13 bankruptcy depending on their income level and assets. For example, people who are trying to prevent a foreclosure on their home might be able to file Chapter 13 and work out a payment plan to keep their home. Filing for bankruptcy puts a stop to any creditor harassment, lawsuits or other actions against the debtor. Once the bankruptcy is discharged, people may begin rebuilding their credit.