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The cost of medical problems

On Behalf of | Dec 13, 2022 | Bankruptcy

The tie between medical problems and financial issues has continued to increase, and with it, so has the concern of many Americans.

Recent studies have shown that as medical issues continue to sweep across the nation, so too do unpaid bills and the fear of filing for bankruptcy.

The prevalence of loans for medical bills

Gallup posted the results of a survey showing that 50 percent of American adults feared the possibility of bankruptcy due to a medical issue. Fifteen percent of all households surveyed had at least one medical bill still unpaid, with those households not having the money to pay off the debt in the coming year.

A quarter of the individuals surveyed also claimed they would have to borrow money to pay off a $500 medical bill. Of the households surveyed, 14 percent received donated loans from family members or friends. 12 percent of respondents also received a way to repay debt through credit card companies.

However, financial hardships often follow in the wake of a couple starting to pay off medical bills with credit cards. For example, if the main income earner in a house ends up incapacitated, the lack of income flow could cause bills to start stacking up right away.

Bankruptcy as a tool for financial relief

For those facing serious financial issues, bankruptcy provides a valid way to get relief. Households that earn less than the state’s monthly median income may be able to file for Chapter 7 bankruptcy. Certain assets might get liquidated, and some debts, including credit card and medical bills, might get dismissed.

Chapter 13 bankruptcy, on the other hand, allows for a household to make and follow a payment plan rather than worrying about liquidating assets. Either option can be a big help.