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Overwhelmed with medical debt? Consider bankruptcy

On Behalf of | Oct 12, 2020 | medical debt, Personal Bankruptcy | 0 comments

Many Americans are finding themselves in a financial predicament. Some have lost jobs or seen reduced hours, which can make it challenging to pay rent, utility, and grocery bills. Many of these individuals have also seen their health insurance affected. They might lose their insurance altogether or struggle to maintain it due to a decreased income. These individuals are then just one hospital visit away from financial catastrophe. Sadly, that’s an all too real situations for many Americans.

If you’re overwhelmed with medical debt, you’re not alone

A recent look at 20 million individuals associated with Credit Karma found that they have about $45 billion in medical expenses that aren’t only past due, but that are also in collections. That averages out to more than $2,000 per person. Medical debt overall is up 7% this year, too, which might be an indication of the trajectory we’re on when it comes to medical debt. These bills, in conjunction with credit card debt, student loans, and decreased income, are too much for many people to handle.

Financial stability is rocky for many

At first glance, a few thousand dollars might not sound all that challenging to pay back over time. However, interest rates and collection fees on many debts, coupled with the fact that many Americans, almost half, don’t have an extra $400 to cover unexpected expenses, mean that many who owe these debts will struggle for years simply to stay afloat. That’s stressful, limiting on your ability to enjoy your life, and downright frightening. Fortunately, you don’t have to spend the next several years of your life trying to escape this outcome.

Bankruptcy might be right for you

Personal bankruptcy provides you with an avenue whereby you can shed burdensome debt, including medical debt, and claim a fresh financial start. Depending on which type of bankruptcy you pursue, Chapter 7 or Chapter 13, you can either sell some assets to payoff creditors as much as possible, thereby resulting in most outstanding debts being written off, or keep your assets and rid yourself of the debt after sticking to a repayment plan for a certain number of years. The point is that regardless of how dark your financial struggles are, there is hope. An experienced bankruptcy attorney can help you walk the path toward that fresh start that you deserve.