Strong evidence from diverse sources amply indicates just how onerous, even pernicious, medical debt is in the lives of many individuals and families in the United States, with Floridians hardly being excepted.
In fact, medical debt is a leading factor driving many people toward Chapter 7 bankruptcy. The Federal Reserve states that nearly one out of every six credit reports has an entry pertaining to a medical debt collection. Another statistic posits that about 40 percent of Americans noted a downward tick in their credit scores in 2012 that owed to unresolved medical payments.
There is little surprise as to why medical bills are centrally implicated in the financial difficulties that challenge so many Americans. Medical expenditures often surface without warning, and the cost for services is — as people across the country painfully know — exorbitantly high. Payments due hospitals and other providers are seldom prepared for in advance of services, and it is often impossible to know what the ultimate price tag will be for an operation or other service before it is undertaken.
The result for millions of people across the country: an infusion of bills from various providers that cumulatively amount to many thousands of dollars they simply can’t pay — at least not over an abbreviated term.
And that leads to providers contacting collection agencies and, for many people, adverse entries on their credit reports. That leads in turn to higher interest rates when they seek to get loans and engage in other transactions. Sometimes it leads to bankruptcy.
As we have noted in select prior posts, and as many media commentators have pointed out, a bankruptcy filing for a person saddled with an insuperable of debt is often far from the worst outcome. In fact, and given that unsecured debt such as medical bills can be discharged via bankruptcy, coming out of a Chapter 7 filing often equates to a fresh start for many people.
No one needs to passively endure a staggering debt load, fearing contacts from collection agencies and believing that they will lose all their possessions. Bankruptcy law provides a process for responsibly dealing with such financial challenges.
A proven bankruptcy attorney can provide further information.
Source: Fox Business, “How medical debt affects your credit score,” Janna Herron, Oct. 16, 2013