Whether due to emergency room visits, an unexpected diagnosis, surgeries or more, medical bills can quickly accumulate. Even after negotiating a payment plan with your medical provider, the debt may seem never-ending.
According to CNBC, two-thirds of those filing for bankruptcy cite medical issues as a main factor in their decision. This ranks above an inability to afford mortgage payments, living beyond one’s means, financially supporting others, student loans and divorce. If you have substantial medical debt, what do you need to know?
Rising costs of emergency room visits
Many across Wisconsin and the rest of the country are financially unprepared for a medical emergency. In fact, Bankrate recently found that most Americans could not cover a $1,000 emergency with savings.
When faced with a medical emergency like a need to go to the emergency room, the financial effects can be staggering. Recent studies find costs for emergency room trips to be surging, causing many to pay more out of pocket. The Health Care Cost Institute (HCCI) found that emergency room visits in 2017 cost $1,389 on average. This increased by 176% from the past decade and does not account for additional costs like bloodwork, drugs or other treatments.
Bankruptcy can discharge medical debts
Many view bankruptcy as a last resort option. While searching for an alternative to bankruptcy can be wise and often productive, in some cases, payment plans or other options will not provide the financial relief you need. Wisconsinites struggling to pay medical debt may find such relief in filing for bankruptcy. Bankruptcy can:
- Relieve you of constant harassing calls from lenders or creditors
- Potentially allow you to keep many of your assets
- Offer immediate relief from paying debts like medical and credit card bills
- Provide you with the ability to rebuild your financial life
Most file for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 allows those who qualify to discharge their unsecured debts like medical bills, allowing some much-needed room in your budget to pay other debts. For those with a steady income, Chapter 13 allows you to form a three- to five-year payment plan to repay debts like medical bills in a much more flexible and attainable time frame.
Deciding to file for bankruptcy can be daunting. However, for many, the benefits outweigh the potential negatives, especially when facing insurmountable medical bills. Discuss your situation with an attorney to determine your options.