Countless Americans live their lives on the edge of financial peril. One significant life event can spell disaster. Facing divorce, job loss, home repairs or medical emergencies can negatively impact household finances for years to come.
Many hardworking individuals consider filing for bankruptcy as an admission of failure – a financial worst-case scenario. Too many people continue to fight to correct a financial situation even when it has become clear that debt relief might be their only solution.
It is often noted that more than two-thirds of all bankruptcies are related to medical issues. This can mean direct medical debt, or time spent away from work due to a medical emergency. A Bankrate study found that only 40% of Americans have saved enough to cover a $1,000 emergency expense. A hospital visit, a sudden influx of prescription medication or lengthy physical therapy can absorb that savings in no time.
Based on numerous factors, individuals can often choose between filing either Chapter 7 bankruptcy or Chapter 13 bankruptcy. While similar in their results, the two methods follow different paths. Chapter 7 is debt elimination bankruptcy and the process moves relatively quickly. Chapter 13 is debt reorganization and repayment. At the successful completion of either process, unsecured debt is eliminated. Medical debt is generally considered unsecured, but a bankruptcy attorney can thoroughly examine your situation and provide guidance tailored to your specific needs.
A medical emergency can quickly drain a bank account even if you have insurance. A high deductible, numerous prescriptions and lost wages can all factor into financial devastation for an entire family. Fortunately, the Bankruptcy Code exists to give individuals a chance to overcome this peril and gain a fresh financial start.