Bankruptcy might help with recently amassed medical debt

| Jul 20, 2021 | personal bankruptcy |

In Will County, throughout Illinois and across the United States, people have been forced to adapt to a radically changed set of circumstances personally and professionally. For many, that has meant job loss, reduced income, an altered family dynamic and recovering from illness. Finances have been a consistent problem. Now, as society slowly returns to normal and government intervention to keep people afloat starts to subside, there will be bills that must be paid. Medical debt is high on the list of concerns.

Survey shows scope of medical debt from crisis

According to a Commonwealth Fund survey of 5,450 people, around 50% who had a financial problem because of the recent events had medical bills in addition to illness, reduced income and losing their healthcare coverage. More than one-quarter reported medical expenses even if they avoided any of the above-listed challenges. Overall, 38% said they had medical expenses of one form or another in the last 12 months. Among the financial issues they dealt with were being unable to pay their debts, receiving calls from collection agencies or adjusting their lifestyle to allocate more money to pay what they owed.

There was no specificity about the crisis, but it was not difficult to make a connection. Fifty-nine percent who became ill and saw their income decrease stated they were confronted with medical bills they could not pay. Sixty-three percent who had decreased income and were no longer covered by insurance said the same. Demographically, Black people were more likely to say they had problems with medical expenses compared to the national average by 55% to 38%. Credit Karma reports that its members accrued $47 billion in medical expenses that were sent to collections by April. On average, they owed $2,200. Reduced credit scores and harassing calls from debt collectors was also referenced as a worrisome trend.

Finding solutions to overwhelming debt can ease fear and worry

Often, people who suddenly find themselves facing bills they cannot pay do not understand that there are viable options available. Personal bankruptcy can clear unsecured debt so the person no longer needs to think about it. Chapter 7 is a liquidation bankruptcy and Chapter 13 is a payment plan. A debtor can assess his or her debts and determine which would be better based on the situation. Of course, it will likely damage the credit score, but once the process is complete, a debtor can set about rebuilding their credit and starting over on firmer financial ground. When trying to eliminate medical debt and stop the harassing calls, it is useful to have advice as to how the bankruptcy process works and if it is an appropriate strategy.

 

Call Now To Schedule an Appointment