Lingering Medical Bills Are Causing More Consumers to Turn to Tennessee Bankruptcy
There's a common stereotype that bankruptcy filers are unrestrained spenders. But statistics show that more Americans file for bankruptcy because of medical bills than credit card debt.
Hospitals and doctors are increasingly farming out patient bills to debt collection companies, according to a recent Associated Press story.
Between 2005 and 2010, the number of Americans contacted by debt collection agencies for unpaid medical debts rose from 22 million to 30 million.
Of these cases, an estimated 3.4 million Americans still have credit reports that show medical debt, even after the debt has been paid.
When your debts get kicked back to collection agencies, it automatically drops your credit score - even if you end up paying the bill.
In the AP story, a couple with seemingly good credit applied for a home loan, only to learn that a $200 bill they didn't even know about had been sent to a collection company, sinking their credit score and their chances of getting the mortgage.
CNN Health estimates that 60 percent of people who file for bankruptcy today do so because of difficulty paying medical bills. But here's the real shocker: nearly 80 percent had health insurance.
In more and more cases, unpaid medical bills stem not from lack of coverage, but from gaps in coverage such as deductibles and co-pays.
When combined with expensive mortgages and unsecured debts - such as credit card debt - small medical bills can be enough to push someone in an already precarious financial situation over the edge.
Sometimes a bill may be affordable, but it goes unpaid due to a dispute with the insurance company over a billing error or other problem. That debt can still be sent to a collection agency - and it can still drop your credit score.
Despite health care reform, the costs of medical treatment are getting more troublesome for American consumers. Tennessee bankruptcy is often the most realistic solution.
Health care is supposed to make us better, not make us sick with stress. If medical debt is causing you pain - either alone or in combination with other forms of debt - filing for bankruptcy in Tennessee may be able to provide relief.
More Blog Entries:
Medical Bills Can Cause Lingering Credit Pain, by Carla K. Johnson, AP Associated Press
Medical Bills Prompt More Than 60 Percent of U.S. Bankruptcies, by Theresa Tamkins, Health