Of the people who stated medical bills as the cause of their bankruptcy, 78% of them had some form of health insurance already. Their health insurance was clearly insufficient for their circumstances.
Why does this happen?
Well, the average co-pay in most plans is 20%. If you get a big bill for over $50k then you need to pay $10k along with the deductible. For most people this would necessitate seeing a bankruptcy lawyer.
If you don’t do anything about overdue health bills, you’ll have to deal with multiple phone calls, harassment, and even court ordered actions.
3 Clever Ways To Avoid Medical Bankruptcy
The best way to avoid these headaches is to prevent medical bankruptcy from happening in the first place. Here are three simple ways you can do this:
- Settle on a lower amount.
For example, if your overdue bill is $20k, you can settle on $14k and have that setup as monthly bills. The main advantage to settling is that it won’t show up on your credit report. Your medical bills will only show up on your credit report after the collection of the debt.
- Ask for discounted payments.
Medical facilities will do this if they have good reasons from you. Good reasons such as your money being too tight month to month to make the expected monthly payments. Medical facilities don’t want you to go through medical bankruptcy. They won’t benefit at all from that. Use this fact to your advantage.
- You can always transfer a part of it to a credit card.
It’s better than filing for medical bankruptcy. It’s also better to pass along the debt to a credit card company than it is to be in debt to a medical facility. A medical facility will have a greater hold on your life.
What You Can Do When All Else Fails
- Get help from your hospital.
Normally they can refer you to their charity service cases, which can help with your medical bills by around 50-75%. The reason these charity cases exist is for the tax breaks the hospital receives from the government. The only catch is that you may need to be within a certain income range to qualify.
- Your government may also be able to help.
They do provide grants to those who are qualified, including children, senior citizens, disabled folks and people who are suffering from diseases that require lifetime treatment.
- File for medical loans.
This is an option almost everybody is qualified for. Affordable interest rates make it easy enough to pay back the loans and your medical bills at the same time.
Have no more options and ready to declare personal bankruptcy? You can learn more about how personal bankruptcy will affect your credit rating here.
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