While the bankruptcy rate overall has been trending upward throughout Kentucky and some neighboring states, very few people slow down to take a look at the factors leading to those bankruptcies and what to do about them. If you are currently struggling with your medical bills and looking at your options, you are not alone. In fact, medical debt is one of the largest contributors to bankruptcy in the entire country, alongside wage stagnation and higher costs of living in general. While coping with one of these factors is common, when they combine, the results can easily destabilize one’s entire credit.
Information from experts
CNBC reported the results of a study from Nerdwallet in 2013 that estimated some 1.7 million people would apply for bankruptcy due to medical debt that year. While it is easy to look at the report and assume the numbers reflect pre-Affordable Care Act studies that primarily affect the uninsured, the fact is that the same study showed that roughly 20 percent of the adults aged 19 to 64 in this country would accumulate medical bills that took longer than a year to pay off-a number that is larger than the total number of uninsured people in the country during that year.
In early 2016, the New York Times revisited the topic and found that while the number of uninsured people in this country has fallen by 15 million since the law went into effect, plans often require hundreds or thousands of dollars in out-of-pocket expenses alongside the coverage. This may lead to smaller debts, but unmanageable smaller debts are still unmanageable. As a result, the number of Americans in financial distress due to medical bills has fallen, but the problem still persists.
What to do
If you face medical debts that seem insurmountable, there are a few options open to you, depending on exactly what level of debt you carry and how far behind you are in your payments. If you are trying to work through medical debt, consider these steps:
- Contact providers you owe about payment plans.
- Seek credit counseling services.
- Apply for consolidation loans to lower payments.
- Talk to an attorney about bankruptcy options.
The last step does not mean going through with bankruptcy, but it does mean educating yourself about the various different types you might encounter and the ways they are likely to change your outcomes and your financial future. Medical debt can be a serious burden, but when you know how to navigate options like bankruptcy, it becomes easier to find your way through to the other side.