It is quite surprising to find that most middle-class, educated Americans having health insurances for themselves and their family file for bankruptcy due to their accumulating medical bills.
Till about 8-10 years ago, this phenomenon was not out in the open and medical problems were not considered one of the reasons for bankruptcy. But every year, new statistics are showing that illness and consequent loss of job have become the reason many well-to-do families file for bankruptcy.
So where is the problem? What has been the result that 62 per cent Americans are filing for bankruptcy for medical reasons (according to a study in American Journal of Medicine published in 2009)?
Health Insurances Doesn’t Covered It All
In the modern day, almost everyone makes a health insurance. Unfortunately with so many loopholes in the system, these health insurances do not really cover a person or families health-related expenditure. For example, a health insurance doesn’t cover physical therapy, prescription drugs and psychiatric care. Moreover, in the last recession when many Americans lost their jobs, their health insurances were automatically scrapped making them fall into a deeper pit.
Can Bankruptcy Be Avoided For Medical Debts?
Fortunately, there are a few ways bankruptcy can be avoided in cases of medical debts. To make this happen, individuals have to first negotiate with their healthcare providers for forgiveness and discounts in repayments. Moreover, if hospital bills can be limited, especially for the uninsured, bankruptcy can be avoided. Another way of avoiding bankruptcy is to get charity on medical bills.
The Affordable Care Act that is to come into effect in 2014 has provisions that can lower medical debt. This Act, also being called the Obamacare will help people not file for bankruptcy in cases of medical emergencies. It is being hoped that with the Act being rightly used, there will be lesser cases of bankruptcy.
Provisions Under Chapter 7 for Medical Bills
Chapter 7 liquidates all your assets and repay your debts in one go. Under Chapter 7 bankruptcy, medical bills are considered unsecured debts much like credit cards. Since they are unsecured debts, they can be completely wiped out and you will be discharged of your medical bills. However, if your treatment is still going on, it is best to let your debt accumulate so that you can file for bankruptcy in one go. You would not want to acquire new debt right after filing your bankruptcy.
Provisions Under Chapter 13 for Medical Bills
Chapter 13 lets you reorganize your financial situation allowing you to repay your debts for a period of 3-5 years. Medical bills are considered as unsecured debts even under Chapter 13 and thus can be discharged. However to get your medical bills discharged you will have to first pay off your secured debts under the repayment plan.
Conclusion
It is true that medical emergencies not only hamper the health but the finances too. To steer out of it consult a reputed attorney who can understand your problem and find a plausible solution.
Attorneyforbankruptcy.com is a leading law firm of California where you can hire most experienced california chapter 13 bankruptcy attorney and medical bills bankruptcy.
Till about 8-10 years ago, this phenomenon was not out in the open and medical problems were not considered one of the reasons for bankruptcy. But every year, new statistics are showing that illness and consequent loss of job have become the reason many well-to-do families file for bankruptcy.
So where is the problem? What has been the result that 62 per cent Americans are filing for bankruptcy for medical reasons (according to a study in American Journal of Medicine published in 2009)?
Health Insurances Doesn’t Covered It All
In the modern day, almost everyone makes a health insurance. Unfortunately with so many loopholes in the system, these health insurances do not really cover a person or families health-related expenditure. For example, a health insurance doesn’t cover physical therapy, prescription drugs and psychiatric care. Moreover, in the last recession when many Americans lost their jobs, their health insurances were automatically scrapped making them fall into a deeper pit.
Can Bankruptcy Be Avoided For Medical Debts?
Fortunately, there are a few ways bankruptcy can be avoided in cases of medical debts. To make this happen, individuals have to first negotiate with their healthcare providers for forgiveness and discounts in repayments. Moreover, if hospital bills can be limited, especially for the uninsured, bankruptcy can be avoided. Another way of avoiding bankruptcy is to get charity on medical bills.
The Affordable Care Act that is to come into effect in 2014 has provisions that can lower medical debt. This Act, also being called the Obamacare will help people not file for bankruptcy in cases of medical emergencies. It is being hoped that with the Act being rightly used, there will be lesser cases of bankruptcy.
Provisions Under Chapter 7 for Medical Bills
Chapter 7 liquidates all your assets and repay your debts in one go. Under Chapter 7 bankruptcy, medical bills are considered unsecured debts much like credit cards. Since they are unsecured debts, they can be completely wiped out and you will be discharged of your medical bills. However, if your treatment is still going on, it is best to let your debt accumulate so that you can file for bankruptcy in one go. You would not want to acquire new debt right after filing your bankruptcy.
Provisions Under Chapter 13 for Medical Bills
Chapter 13 lets you reorganize your financial situation allowing you to repay your debts for a period of 3-5 years. Medical bills are considered as unsecured debts even under Chapter 13 and thus can be discharged. However to get your medical bills discharged you will have to first pay off your secured debts under the repayment plan.
Conclusion
It is true that medical emergencies not only hamper the health but the finances too. To steer out of it consult a reputed attorney who can understand your problem and find a plausible solution.
Attorneyforbankruptcy.com is a leading law firm of California where you can hire most experienced california chapter 13 bankruptcy attorney and medical bills bankruptcy.
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