One of the top reasons Americans file for bankruptcy is medical debt. One medical emergency can cause many people to have delinquent medical bills. With stagnant wages and ever-increasing medical costs, many Americans are struggling or simply unable to pay their medical bills. This leaves them with few options apart from bankruptcy. While it’s not easy to pinpoint the number of bankruptcies directly linked to medical bills, the number is clearly quite high.
The Ins and Outs of Medical Debt
Not all debts are the same. Unlike other bills, medical bills are typically submitted to a third-party, or your insurance company, first. Sometimes, the complexities of this system can make it difficult for you to determine exactly what you owe. Once the insurance pays their share, the bill will then come to you, and you will be responsible for coinsurance, copayments or other portions of the total due. In some cases, the process can be so lengthy that you aren’t even aware how much you owe until the bill has already gone to collections, thereby damaging your credit score.
Medical bills can strain your finances in a number of ways. In some cases, these bills are unexpected. You might have thought insurance would cover a particular procedure or medicine, and it did not. You may also face excessive charges for using out-of-network providers or when a necessary procedure is denied. If you pay a bill using a credit card, the interest will keep accruing until you’re able to pay it off.
Unfortunately, many people still slip through the cracks with prohibitively high bills that they just cannot pay. As with other unpaid debts, medical bills that end up in collections can seriously damage your credit report. You could have a tough time getting a new credit card or loan, or you could be facing sky-high interest rates for everything from credit cards to mortgages.
If you’re facing excessive medical debts and cannot get relief through other channels, bankruptcy could be an option to help relieve your burden and ensure more secure finances. Contact First America Law today at 1-800-695-7674 to learn more or to schedule your free evaluation.