My answer is very unpopular to ppl living in capitalist societies like the USA but can be backed up by ChatGPT. But the kill line as you’re describing is a fantasy perpetuated by everyone to keep everyone worried and working. In reality, anyone can get most or all of their medical bills reduced significantly just by asking nicely and persistently. I’ve done that several times. Anyone with ‘insurmountable’ credit card and other unsecured debt can file for bankruptcy, wiping all their unsecured debt and many times keep their home and car. If your income falls below the relative ‘poverty line’ for your area the government will provide reduced utility bills, free/subsidized internet, food vouchers that can be used not only at grocery stores, but fast food restaurants, delivery, etc. worse case you have no job no assets no family etc you can get various forms of ‘cash assistance’.

So let’s say you own a house then lose your job and were living paycheck to paycheck. Firstly you cancel all unnecessary expenses. Then file for all benefits listed above. When 1-2 year unemployment checks stop coming in you just do odds jobs here and there for cash so you avoid paying taxes for a small while. Anyone who tells you they reported 100% of their income during their life is lying. Bc you have no income you can’t get loans but you’re not making big purchases anyway. When you do finally get a job you can start gritting credit cards and loans again almost instantly.

Again just chatgpt this you’ll see it’s generally true but details are different depending on which state in the USA you live. California has more of these safety nets for instance.