Rising medical costs lead to bankruptcy for many in Texas
When a person or family is facing a medical emergency or severe illness in Grayson County, the medical costs can be astronomical. Despite a person’s best intentions, paying off that medical debt is often overwhelming, especially if their illness is long-term and requires additional medical care. Even people with insurance coverage are faced with the challenges of meeting everyday needs and often times the insurance company will not pay for everything, leaving them thousands and even hundreds of thousands of dollars in debt.
Millions struggling with medical debt
A new study estimates that about 2 million people will file for bankruptcy protection this year because of their medical debts according to CNBC. The study was compiled by data from the Commonwealth Fund, the federal court system, the Centers for Disease Control and the U.S. Census. A majority of the bankruptcies are estimated to come from people between the ages of 35 to 54.
Part of the problem seems to be that many people have insurance policies with a high deductible, which means that a serious injury or illness comes with an out-of-pocket payment of up to $5,000 or $10,000 – cash that many people simply don’t have. In such cases, people may rack up credit card debt in an effort to pay those deductibles. For other people, they may have lost their job, and with it, their insurance, leaving them without many options.
Bankruptcy can offer hope
Over the last few years, the challenge of paying for medical care has left Americans with little choice but to file bankruptcy. This has resulted in making medical debt the leading reason for bankruptcy filing. According to the Business Insider, bankruptcy can provide people with a chance to start over again but there are some things that people should be aware of such as:
- Income earned in the six months before filing for bankruptcy can influence a person’s qualification status.
- There are state-specific qualifications that exist, such as household size.
- Even though a person’s credit history will reflect the bankruptcy for several years, the credit score can climb within a year of filing.
- If the medical bills have been moved to credit cards, it may be easier to qualify for bankruptcy.
- Bankruptcy will only resolve current financial issues; future medical costs are not covered.
While bankruptcy may not take care of a person’s entire debt, it can give them relief from a good portion of it and help them be able to meet their obligations while rebuilding their financial foundation. If you are struggling with medical debt you should talk with an experienced attorney to learn how bankruptcy works and the many options that may be available.