Many Tennessee residents are well aware that there have been many changes to healthcare laws in the United States in recent years. Under the Affordable Care Act, more people are supposed to receive affordable access to healthcare. Hopefully, these increased insurance options will eventually cover more Tennessee residents so that medical bills are covered.
However, even with insurance, a serious medical problem can ruin a person’s financial health. The cost of healthcare has been growing exponentially in this country — outpacing inflation for several years. With out-of-pocket costs, medical bills can make even a minor medical crisis very expensive when all is said and done.
According to a new study, medical bills are going to be the number one reason that people in the United States file for bankruptcy, surpassing mortgage debt and credit card debt. While many people may have insurance, this data reveals that 78 percent of people who file for bankruptcy because of medical expenses had insurance.
If people are overwhelmed with medical debt and need to file bankruptcy, experts suggest to wait until all the medical problems are fixed. By waiting, people can get a fresh financial start instead of immediately accumulating more debt. Experts also say that people should try to negotiate their medical bills with the doctors, hospitals and other creditors before considering bankruptcy.
Furthermore, people should understand their legal options prior to making any of these decisions. People may want to file for Chapter 7 bankruptcy and liquidate all their debt without a repayment plan. However, people need to understand how that could affect other aspects of their financial health including their mortgage and their credit history before filing.
Source: Fox Business, “Medical Bankruptcies are Still a Problem, Here’s What to Expect,” Donna Fuscaldo, Feb. 18, 2014