Medical Bills Cause of Many Bankruptcies
A recent study has found that medical bills have been the cause of the majority of US Bankruptcies. This is not surprising to me in the least bit as I have heard just about every reason why somebody may want to file for bankruptcy. Medical bills are at the top of the list of possible reasons to file for bankruptcy, especially if a person does not have medical insurance. Imagine being airlifted off of a mountain or having 5 heart attacks and then being asked to foot a bill for $100,000, that actually happened to clients of mine. Filing for bankruptcy is not always something that happens due to the immediate actions of the person seeking legal assistance with their financial situation. Filing for chapter 7 bankruptcy can wipe out medical debts as well as other unsecured debts such as credit cards or lines of credit. A chapter 13 bankruptcy can allow people to make payments on their debts over a period of 3 to 5 years, and whatever is not paid back in accordance with the governments means test will then be discharged. These are not bad options considering people could face garnishments of wages and bank accounts or liens placed on property.
Although many of our bankruptcy clients come to us with medical bills; credit card debt, the possibility of foreclosure, and repossessions are all common reasons for the average person to file bankruptcy. All it takes is one bad bill or a period of unemployment to be overwhelmed by debt. For most people, the biggest concern about filing for bankruptcy is that their credit will take a hit. While this can be true, most people who haven’t paid their bills don’t have very good credit to begin with and would actually benefit by filing for bankruptcy to clean the slate so that they can work to rebuild their credit faster. Most people can qualify to buy a house in 2-4 years after filing for bankruptcy although you may see the bankruptcy case appear on your credit report for up to 10 years.