Unexpected medical expenses result in more bankruptcies in the United States than in any other First World country in the world. Unexpected illnesses or injuries that require surgery or any other form of medical attention can cause an individual ot incur extremely high debts. Even individuals who have health insurance can face difficulties meeting deductibles and co-pays. In some cases, the high medical debts lead an individual to declare bankruptcy.
Medical debt can affect anyone
Medical bills can arise without warning. You could be working steadily, paying your bills, and being responsible with your money before a medical emergency changes your entire situation.
A medical accident or condition can lead to:
- Hospital charges
- Hospitalizations
- Operating expenses
- Medication fees
- Therapy costs
- Income loss from not being able to go to work
Sometimes, an individual or family finds themselves dealing with increasing medical costs at the same time that their income is falling. This makes it nearly impossible to keep up with all other payments, such as credit card debt, mortgage, or auto loans.
How medical debt impacts financial stability
In contrast to other kinds of debt, medical bills cannot always be avoided. When payment becomes impossible, collection companies can initiate collection efforts against you. In some cases, they can file a lawsuit and garnish your wages.
In some cases, folks try to deal with their debt by placing it on a credit card. But this only kicks the can down the road, and the interest rates tend to be extremely high.
The strain that comes with having too much debt begins to impact all aspects of one’s life, be it psychological well-being or family relations.
Can bankruptcy eliminate medical debt?
Your medical debt can be discharged in bankruptcy. Medical debts are usually considered unsecured debts and are not backed by any collateral.
A Chapter 7 bankruptcy filing can offer relief from medical debts for individuals who qualify. It provides an opportunity to discharge these kinds of debts fairly quickly, provided the individual meets the required criteria.
Alternatively, individuals with regular income can benefit from discharging their medical debts using Chapter 13 bankruptcy. It involves restructuring the debt and paying it over a period of three to five years.
The automatic stay offered by filing for bankruptcy offers protection from creditors.
Bankruptcy is not a financial failure
Many people do not want to think about filing for bankruptcy due to shame or a belief that they can handle their debt problem themselves. But medical debt can come out of nowhere if you’re not prepared.
Bankruptcy is created for those who are trying to get out of difficult situations and are being responsible about it. Bankruptcy is not the sign of a failure but a step towards a new, stable life.
Talk to a Danville, IN, Bankruptcy Attorney Today
Chris Arrington represents the interests of Danville residents who are saddled with medical debt they cannot afford to repay. Call our office today to schedule an appointment, and we can begin discussing your next steps right away.