A common reason that people file for bankruptcy is because of mounting medical bills. A 2019 NIH study reveals that roughly three fifths of respondents attribute their bankruptcies to overwhelming medical expenses, a trend likely to continue with the costs of medical care rising with more than half of American adults carrying medical debt.
As many who have weathered a medical event can attest, it is not just about the medical bill, it is all the other bills that increase or do not get paid while dealing with a medical crisis. People often charge up their credit cards to pay medical bills and then come up short when the credit card payments are due. Homeowners sometimes take out a second mortgage to be able to afford to pay for a lifesaving procedure, only to find they cannot keep up and risk losing their homes. Some people may become too sick to work or lose their jobs due to a health condition, only compounding their debt problem.
The notion that health insurance will be there if there if a medical problem occurs only gets people so far…even Americans with health insurance struggle with medical debt. Many have insufficient coverage which increases out of pocket costs on top of already expense policies. The rising costs of health care coverage combined with co-pays, deductibles and policy exclusions represent real financial harm to individuals and families when unexpected medical events strike.
Fortunately, personal bankruptcy offers those struggling with debt, including medical debt, the opportunity to discharge unsecured debt including medical bills and credit cards – two of the most prevalent sources of debt following a medical emergency. For those with few assets and little income, Chapter 7 bankruptcy can erase most debt, offering a clean slate to start anew. For people with more income and assets, a Chapter 13 repayment plan will organize debt into an affordable payment over a 2 to 5 year period at which point remaining unsecured debt may be discharged.
When you are facing a difficult financial situation following a medical event, contact bankruptcy attorney Charles E. Covey for immediate assistance. It is important to discuss your situation promptly to avoid making costly financial mistakes when bankrupt protection may be the solution to put your financial life back on track. For a fresh start, contact Charles E. Covey today at 309-674-8125.