As previously discussed in this blog, medical debt can cause huge burdens on individuals in New Jersey and elsewhere. When medical expenses add up and individuals or families are unable to timely pay their medical bills, they could encounter serious financial problems. Unlike other financial issues such as credit card debt, medical debt is not caused by unwise monetary choices but rather it often occurs because of unforeseen circumstances.
Medical Bills and Financial Hardship
An accident or illness could unexpectedly occur, and even when an individual is insured, these situations could result in financial hardship and unpaid medical bills. When medical bills go unpaid, an individual's credit score could be harmed. This could result in bigger issues such as problems applying for a loan, applying for a credit card or even leasing an apartment or a home.
According to the Consumer Financial Protection Bureau, roughly 43 million Americans have unpaid medical debt listed on their credit report. Additionally, about 18 to 26 percent of personal bankruptcy filings are caused by medical debt.
Discharging Medical Debt Through Personal Bankruptcy
Whether an individual has unpaid medical bills or medical charges applied to a credit card, there are options available to discharge medical debt. Depending the debtor's income, he or she could liquidate their debts through a Chapter 7 bankruptcy or enter a repayment plan to repay part of their debts in a Chapter 13 bankruptcy.
While it is a difficult decision to make, individuals struggling with medical debt should understand how bankruptcy could help them get a fresh financial start. Overcoming financial problems is not an easy process; however, becoming well-informed could help debtors fully address their financial hardships.
Contact a New Jersey Personal Bankruptcy Attorney
If you need help with overwhelming medical debt, contact a personal bankruptcy attorney today.
Source: The Conversation, "Why medical debt - and bankruptcy - are growing problems"