Editors Note: This article is part of our Medical Bankruptcy in America series. Each case is drawn from publicly filed federal bankruptcy records. Identifying details about individuals have been removed to protect privacy. The financial information and creditor listings referenced are documented in court filings.
We publish these cases to examine the role medical debt plays in personal bankruptcy and to assess accountability where federally supported healthcare programs are involved.
They own their home.
It is valued at $520,000.
They have retirement savings through Colorado PERA totaling nearly $139,000.
One spouse works as a public school teacher, earning approximately $5,900 per month before deductions.
After payroll deductions, their take-home income is about $4,564 per month.
They are not without assets.
They are not without income.
But their monthly household expenses total $6,229.
Every month, they are short roughly $1,665.
That deficit does not stabilize.
It compounds.
And in the middle of that financial gap sits medical debt.
Listed among their unsecured creditors:
UC Health — $80,692
UC Health — $1,065
Together, more than $81,000 owed to UC Health.
Additional medical-related debts appear as well:
• Ute Pass Regional Ambulance District
• Mountain Springs Recovery
• Peak Gastroenterology Associates
• Pulmonary Associates
• Radiology & Imaging Consultants
But the dominant unsecured creditor is UC Health.
UC Health participates in the federal 340B Drug Pricing Program.
That matters.
Their total unsecured debt is $113,505.
More than $81,000 of that is owed to UC Health alone.
Their total liabilities — including mortgage and vehicle loans — exceed $457,000.
The home exists.
The retirement account exists.
The teacher’s salary exists.
But the monthly math does not work.
A household running a deficit of more than $1,600 per month cannot service an additional $81,000 medical obligation.
It becomes mathematically unpayable.
The 340B Drug Pricing Program allows participating hospitals to purchase outpatient drugs at steeply discounted prices.
The program was created to help hospitals stretch resources and support vulnerable patients.
Hospitals are not required to pass those savings directly to patients.
But when a 340B-participating hospital appears as the largest unsecured creditor in a Chapter 7 filing, the tension becomes clear.
If the purpose of 340B is to strengthen care for financially vulnerable households, how does an $81,000 hospital claim coexist with that mission?
Were charity care policies applied?
Were hardship reviews automatic?
Were internal 340B revenues used to reduce patient exposure?
The bankruptcy filing does not answer those questions.
It shows the outcome.
A working household.
A monthly deficit.
And a 340B hospital as the largest unsecured creditor.
Medical bankruptcy is not confined to the asset-less.
It reaches into middle-income households with mortgages and retirement accounts.
When large hospital claims — particularly from 340B-participating systems — dominate unsecured debt schedules, policymakers must confront the structural question:
Is the program strengthening patients, or merely strengthening institutions?
That is not rhetoric.
It is a documented bankruptcy.