Number 1 Reason People File For Bankruptcy
Most people think those that file bankruptcy do so because of large amounts of consumer debt like credit cards or personal loans, but they’re wrong—it is medical debt. According to the Kaiser Family Foundation in an article in USA Today, more than a quarter of U.S. adults struggle to pay their medical bills, whether they have medical insurance coverage or not.
Bankruptcy Due to Medical Bills
It’s estimated that medical debt is the number one source of personal bankruptcy filings in the United States. As a Spokane bankruptcy attorney, I’ve found that it’s the same here in the Spokane area. Just one serious medical event can take a toll on a person’s finances.
It’s usually a double edged sword—you get the unexpected medical bills, and you were unable to work for a period of time. So your wages and income dropped making the situation even more difficult to recover from. Usually, a person or family has some savings and can make it out of one limited event, but if medical issues and bills reoccur and those emergency resources have been exhausted, then there’s nothing left to fall back on
Emergency Savings Can Help But Most People Don’t Have Enough
According to recent data 69 percent of Americans have about $1,000.00 in savings. Not enough to get someone through a medical crisis. There are things a person can do to ramp up their savings, which can help avoid medical debt and possible bankruptcy. Start with the basics, like creating a budget so you can accurately track what you spend. Identify possible ways to cut expenditures out of your budget and move that money into savings. Look for expenses like going out to dinner, spending too much on food or clothing, cable, giving money to children. Take this money and put it into an emergency fund.
Bankruptcy—The Last Resort For Most People
If you find yourself in a bad situation where medical bills, illness or injury have caused large debts that you cannot repay, we can help. As a Spokane bankruptcy attorney with over 20 years experience, we are available to sit down with you and discuss your options. We know how important it is to have a thorough understanding of your situation before taking action and will take the time to review how a Chapter 7 or Chapter 13 bankruptcy can impact and improve your financial future. Contact us for a free consultation.
Real concern, real help, and the consultation is free.