One of the most common reasons for filing bankruptcy is medical debt. It’s a major burden on family finances and a significant cause of financial devastation. A study from the American Journal of Medicine reports that nearly two out of three people who file for bankruptcy have at least five thousand dollars of medical bills. And a large number of them have far more than that.
In the short term, bankruptcy can be a great way to get out of a financial pinch. However, if you’re looking for a longer-term solution, you’ll need to consider other options.
There are many things to consider when you’re trying to decide whether or not bankruptcy is right for you. First, you should understand the different types of bankruptcy. A Chapter 13 bankruptcy, for example, can give you a fresh start while allowing you to pay off your medical bills over a period of three to five years. In addition, it can help you establish a better relationship with your health care provider, making it easier for you to keep a steady flow of care.
On the downside, bankruptcy can have a negative impact on your credit score. It can also limit your ability to get loans for things like student loans or a mortgage. In some cases, your creditors may turn to collection agencies instead of contacting you directly. In addition, if you file for bankruptcy, you’ll lose any credit cards you have.
Depending on your situation, you may be able to file for medical debt relief in a more conventional manner. If your income is low enough, you might qualify for a zero percent payment plan from your health insurance or medical care provider. A good bankruptcy attorney can assess your financial situation and advise you on your best options.
While there are several different ways to manage your medical bills, bankruptcy is one of the most effective. In a typical Chapter 7, the debtor is able to clear up all his or her medical bills within four months of filing. As a result, the bankruptcy is often a quick fix for those with unmanageable medical bills.
If you can’t afford to pay your medical bills on your own, you might consider a debt consolidation loan. A number of hospitals and medical providers are willing to work with you to help you get out of the red.
In some cases, you’ll get a money judgment from your healthcare provider. Luckily, there are still plenty of other solutions to get out of debt. If you need a little extra help, you can try a debt consolidation loan or seek advice from a reputable bankruptcy attorney.
A recent study found that medical debt has the highest impact on a person’s credit rating. Even if you don’t have much, you’ll likely have a lower credit score than you’d like. As such, you should make a plan to pay off your medical debt as soon as possible.
