The Number One Reason People Declare Bankruptcy
Every year, over 1.5 million bankruptcies are filed. About 97% of them are filed by individuals. Bankruptcy is an extremely important tool and can be life-changing if used correctly. People who file for bankruptcy are normal, everyday citizens usually over age 45. They are married with families and plans for their lives. Sometimes things happen that are beyond our control. Amongst these things are medical problems.
Bankruptcies Related to Medical Expenses
This may or may not surprise you, but medical expenses are the number one cause of bankruptcy in the United States. Here are some quick facts:
- 4 out of 5 people that declare bankruptcy because of medical bills have health insurance.
- 1 in 10 adult Americans delay medical care because they cannot afford it.
- Just under 10% of adults struggling to pay their medical bills have declared bankruptcy.
- Roughly half of all collections accounts on American’s credit reports are medical bills.
Clearly, medical bills are a problem for millions of Americans every year. What can you do to avoid overwhelming medical expenses?
Tips to Avoid a Pile Up of Medical Bills
Healthcare expenses are tough to deal with and there is no getting around that. However, there are ways to protect yourself from an insurmountable situation.
- Talk to the billing department of the provider. They may be able to offer insight on private insurance, public coverage, and charities available to you.
- Take a very close look at your bills. Billing and coding errors happen all the time. Disputing a bill is a perfectly valid practice. Healthcare is a product just like anything else.
- Consider using a credit card to pay your medical bills. While you should still be sure to pay at least the minimum balance every month, you may be able to buy yourself some time.
What Can You Do If You Have Unmanageable Medical Bills?
Opening that envelope when you know a nasty medical bill inside is never fun, but before you pay it there are some things you can try.
- Talk to the billing department and negotiate your bill. The first bill they send is often an offer. If you have extenuating circumstances, you can use that to your advantage.
- Ask the hospital or other provider if they can offer a 0% interest payment plan. Many times, you do not even have to qualify. This option is preferable to a hospital because it saves them from having to sell the bad debt to a collection company for a fraction of the cost.
If you are buried in medical bills and have exhausted your options, you need help. Bankruptcy can be a wonderful tool for people in this situation. Medical bills are an unsecured debt and can be drastically reduced or eliminated altogether in bankruptcy. Contact Elias Dsouza for a free bankruptcy consultation.