Education for struggling consumers regarding medical debt and bankruptcy can be helpful across the country. Medical bills are a leading reason consumers file for bankruptcy. In fact, more than half of all personal bankruptcies are due to medical debt. When medical expenses are a significant portion of overall expenses, it is important that struggling consumers are familiar with the different options available to them, including bankruptcy options.
Medical debt can be a significant concern, and struggle, for the majority of Americans in some communities. The Consumer Financial Protection Bureau reports that 20 percent of Americans will be turned over to medical collections during the current year. In some states, for example, one community resource center for struggling consumers might report 7 in 10 consumers who come to them seeking assistance have medical debt of some nature. It seems to be problem regardless of the whether the individuals are insured or not One representative reported, in fact, that the majority of consumers they help who are struggling with medical debt have insurance.
In addition to consumer resources, legal options exist for consumers, such as personal bankruptcy. Personal bankruptcy options include Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both types of bankruptcy provide a temporary stay upon filing for bankruptcy which protects struggling consumers from collection actions, including those associated with medical bills, which may proceed more quickly than some other types of collections actions. Chapter 7 bankruptcy allows struggling consumers to liquidate assets to repay debts, and Chapter 13 bankruptcy allows consumers to reorganize their debts to repay them according to a repayment plan.
Struggling with medical bills can be overwhelming, especially on top of the challenges that likely led to the accumulation of the medical debt in the first place. There is a wide variety of resources available to Tennessee consumers, and they should be familiar with all of them when deciding what option is best to ultimately enjoy relief from the stress of medical debt.
Source: CJonline.com, “Got medical debt? Learn about your options Sept. 6,” Morgan Chilson, Aug. 30, 2016