In Utah and throughout the United States, people can find themselves facing financial challenges for a litany of reasons. That may include medical expenses, job loss, overspending on credit cards and more. Since the early part of 2020, unforeseen circumstances with unexpected health issues created a storm with the combination of the above-mentioned catalysts for financial woes resulting in debtors unsure of what to do to pay their overwhelming bills. As lawmakers and consumer advocates try to find solutions, it may be wise for people to think about how to get out from under massive bills on their own by considering bankruptcy.
Survey shows medical debt is massive; lawmakers seek solutions
Given the events of the past 15 months, it is no surprise that medical debt is one of the fastest growing causes of financial turmoil in the U.S. A LendingTree survey highlights medical debt with 60% of Americans owing between $5,000 and $9,999. While the health crisis is perceived as a common reason for medical expenses, basic care is the spark for people to have amassed this debt. That includes going to the emergency room, seeing physicians and specialists, childbirth and trips to the dentist.
In the U.S. Senate, several Democrats are trying to get the Consumer Financial Protection Bureau (CFPB) to take steps to help debtors. Even though there has been substantial governmental intervention to keep people afloat as they have lost jobs and needed assistance to pay their rent or mortgage, debt is staggering and will eventually force people to weigh their options. Regarding medical debt, the senators want it to stop being part of a credit report; debt collectors to be obligated to give debtors alternatives for financial help; give information on the Affordable Care Act; stop reporting debtors who are appealing or are in outright dispute over a debt; end constant phone calls about debt; and more.
For many, bankruptcy can clear medical debt
Even with the help given to people with medical debt and these proposals, many will still face the uncertainty of bills they cannot possibly pay being piled on top of other expenses that have ravaged their finances. Often, people dismiss bankruptcy out of hand because they think it is a shirking of their responsibility or the aftermath is not worth it. In truth, whether it is a Chapter 7 liquidation or a Chapter 13 payment plan, bankruptcy is a worthwhile endeavor that helps people get back on stronger financial ground and eliminate debt. Medical debt can be completely cleared through a bankruptcy plan. Before relying on the government or other entities to help, it is useful to understand the bankruptcy process. Discussing the financial issues with those who are experienced in bankruptcy and debt relief can yield information with what can be done.