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There are several reasons people file for bankruptcy. What may come as shocking news is that most people are a SINGLE major health issue away from considering bankruptcy as an option. How can this be when majority of families have some form of health insurance? For one thing, it all depends on a number of circumstances. Here are a few examples of what needs to be considered:
• What type of insurance you have
• What sort of medical issue you have
• What is the co-pay percentage
Medical bills are actually the biggest cause of bankruptcies within the United States. In 2013 alone, almost 2 million people had filed for bankruptcy citing medical bills as their reasons. Even health insurance provides minimal help in preventing these cases.
Why?
One reason is that the average co-pay in most plans is 20%. This works out well for check-ups and minor injuries but if you happen to contract a major illness or get in a serious accident, you could possibly rack up a bill over $50,000 where you would need to cover 20% or $10,000 along with the deductible. For just about anybody, this would be a life-changing tragedy that necessitates seeing a bankruptcy lawyer.
Who are affected?
Of those who have stated medical bills as their reasons for filing bankruptcy, 78% of them had medical insurance of some sort. Most of those affected were educated middle-class families. 1 out of 5 Americans will face problems paying medical bills this year. Accidents and life-changing diagnosis can happen to anybody.
Even with proper savings and good spending habits, the burden of some medical bills is simply too much for most people to handle. This is a problem that an estimated 56 million Americans will need to face this year alone.
What can happen?
Seeing as most health care institutions employ their own means of collecting debts, overdue health bills are treated the same way as other types of debt regardless of the fact if you are now incapable of maintaining your job due to your health issue. You can expect similar means of debt collection such as multiple phone calls, court ordered actions, and other harassing techniques.
How to address the issue?
Bankruptcy is, and should always be, considered as the final option and should only be seriously considered once all other options are exhausted. Lawyers that specialized in bankruptcy are also experts when it comes to finding working solutions for debts. Your best course of action would be to seek the assistance of a bankruptcy lawyer as soon as you are facing 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 caught blindsided by such big bills that they find themselves at a loss for what to do. Simply having the knowledge that 3 out of every 5 bankruptcies are caused by medical bills is already a good start. Knowing is always half the battle and it always beats being caught off-guard.
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Source by Kala Shashi
