Medical debts have contributed to a growing trend of financial hardship for many of Kentucky’s working families. Overall, more than 135 million adults across the nation find themselves struggling because of health care expenses.
As reported by CNBC, co-pays and out-of-pocket costs not covered by an insurance plan are the primary causes behind nearly 67% of the bankruptcy petitions filed. Suffering from an illness or a medical condition, however, is only part of the challenge. An individual who needs to take time off from work to undergo treatment, surgery or a procedure may see his or her income negatively affected. Uncompensated time off from work can lead to falling behind on mortgage, auto loan and credit card bills.
Paying medical bills while losing control of debt balances
When an individual returns to work and resumes earning income again, he or she may begin to focus on paying off recently acquired medical debts. While some health care providers are willing to work out a payment plan, many of their patients often discover that tightening a household budget to pay down medical bills doesn’t necessarily work out as hoped for.
Dealing with unforeseen medical bills can cut into funds previously available for paying down revolving credit balances. Making only minimum payments while still using credit cards can push balances over the limit. It could also cause interest rates to increase. The typical end result is an overwhelming growth of monthly debt.
Considering bankruptcy as an option for relief
Societal myths about bankruptcy might cause individuals who may benefit from it to shy away from their options. Many believe that they must give up their house or car, but oftentimes, the court allows an individual to keep his or her home, vehicle and personal belongings.
Medical debts are the number one reason individuals clean out their savings or retirement plans. Under certain circumstances, a petitioner could keep these after a bankruptcy filing. Choosing the right bankruptcy plan may provide a workable means of getting out from under a crippling burden of medical debt.