There are several reasons why people file for bankruptcy. What may be shocking news is that most people have a SINGLE major health problem that separates them from considering bankruptcy as an option. How can this be when most families have some form of health insurance? On the one hand, it all depends on a number of circumstances. Here are some examples of what to watch out for:
• What type of insurance do you have?
• What kind of medical problem do you have?
• What is the copayment percentage?
Medical bills are actually the leading cause of bankruptcy in the United States. In 2013 alone, nearly 2 million people filed for bankruptcy citing medical bills as reasons. Even health insurance provides minimal help in preventing these cases.
Why?
One reason is that the average copayment in most plans is 20%. This works well for minor injuries and checkups, but if you contract a serious illness or have a serious accident, you could possibly rack up a bill of more than $ 50,000, where you would have to cover 20% or $ 10,000 along with the deductible. For almost everyone, this would be a life-changing tragedy that requires seeing a bankruptcy attorney.
Who is affected?
Of those who have declared medical bills as their reasons for filing bankruptcy, 78% of them had some form of health insurance. Most of those affected were educated middle-class families. 1 in 5 Americans will have trouble paying medical bills this year. Anyone can suffer accidents and life-changing diagnoses.
Even with the right savings and good spending habits, the burden of some medical bills is simply too much for most people. This is a problem that an estimated 56 million Americans will face this year alone.
What can happen?
Since most health care institutions employ their own means to collect debts, past due health bills are treated the same as other types of debts, regardless of the fact that you are now unable to keep your job due to your problem. of health. You can expect similar means of debt collection, such as multiple phone calls, court-ordered actions, and other harassment techniques.
How to tackle the problem?
Bankruptcy is, and should always be considered, the final option and should only be seriously considered once all other options have been exhausted. Bankruptcy attorneys are also experts in finding employment solutions for debts. Your best course of action would be to seek the help of a bankruptcy attorney as soon as you are faced with a massive medical bill.
The common belief is that credit card debt or mortgages are the main causes for filing for bankruptcy. Most people are surprised by such large bills that they don’t know what to do. Simply knowing that 3 out of 5 bankruptcies are caused by medical bills is a good start. Knowing is always half the battle and it is always better than being caught off guard.