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What You Should Know About Medical Bankruptcy

Medical bankruptcy is also known as medical debt. It is a declaration that is made (legally), stating that a person is completely unable to pay his or her medical debts. The absolute formal bankruptcy processes differ from one region (country and state) to another. However, they normally are about a person making a plan to have his/her debts pardoned, in exchange of surrendering his or her own personal possessions. One may also agree to some type of arrangement to make the payments. The most common case of this is when one finds himself or herself in debts as a result of bills that relate to a serious illness or severe injury.

Medical debt, unlike other types of debt, is usually brought into existence by accident or faultlessly. This is because people do not have any control over circumstances that involve falling ill or getting injured – that lead to having health care services that become unaffordable. Since these healthcare remedies are usually unavoidable and one cannot do without them, more sympathy is found in medical debt than is found in other forms of debt; and some of this sympathy is given in the form of advice that people should not attempt to convert it to the type of credit card debt that results in dealing with collection agencies, like portfolio recovery.

In countries lacking government sponsored healthcare, this kind of bankruptcy is very common. To cover medical costs, patients in such areas as these, may buy health insurance – this is if they have the money. In any case otherwise, they may go without the insurance and take care of the total bill for their costs in medical services. There are those who have health insurance, but may be forced to foot their medical costs, in case the insurance company refuses to.

For example, if an unexpected injury occurs or illness attacks, a person can find it hard to afford all the bills from office visits, surgeries, laboratory testing and prescription drugs; and they are further burdened when they go in to default, and debt collectors, like transworld systems, end up adding on additional fees!

The procedure of the declaration of medical bankruptcy is usually a tediously long drawn-out process. There are other numerous options that somebody can have a look at, at first. There are some places where insurance billing departments and hospitals become lenient, allowing a person/patient to make payments in little portions of the entire bill – over a longer duration of time. This particular person can equally ask for smaller fees, as well as, request for donations from charities, like The Salvation Army!

One can file for bankruptcy in the event that he (or she) has been successively unable to pay or come up with other solutions in which they can pay off the medical debt. A judge does review the debt and the individual’s possessions (or other assets of finance) in order to evaluate whether or not that individual is a good candidate for bankruptcy. This depends on that area or region’s particular laws for bankruptcy. If a bankruptcy judge makes a judgement that the candidate is fits the criteria for bankruptcy, he or she will be exonerated from the responsibilities of paying the full medical bills.

As much as medical bankruptcy can help one reduce the debt amount a person has, there are also possible disadvantages that come with it. One of these disadvantages is that those people who have been legally met the criteria for medical bankrupt, they may not be approved to get a loan (or credit) for several years, later. Moreover, many regions have limitations on the number of times one can be declared bankrupt. This is the reason why it is always advisable to claim medical bankruptcy as the very last resort, as one may have new debts (from collection agencies, like westlake financial services) that may occur afterwards – leaving the consumer with far less legal options to resolve the debt.

Medical debt is a conspicuous phenomenon, nowadays, in the United States of America. People living in less developed countries with low income will usually gravitate towards whichever aid they can get from NGOs (or the state), without having to go into debt. Public coverage of costs for healthcare is most comprehensive in developed nations. However, in the United States, even when a patient is covered by an insurance company, a considerable portion of the medical costs still remain the responsibility of the patient; as stated in the official order known as The Patient Protection and Affordable Care Act coverage of 2010.

A survey conducted in 2007 discovered that almost seventy million Americans have difficulties paying their doctor bills, thus burdening them with more medical debt. Studies also show that people tend to augment their medical debt further, when they lack medical health insurance necessary to get medication, along with the necessary procedures and follow up treatments.

What Are The Causes Of Bankruptcy?

What Are The Causes Of Bankruptcy?

When an individual or business entity cannot clear their debts to the creditors, their legal status is known as bankrupt or bankruptcy – in most cases, this legal status is usually imposed through a court order and through the authorization of the debtor. There are however major things that can lead to bankruptcy.  In the recent years, this has increased in so many parts of the U.S.  Because of this, the congress has clearly addressed some issues to do with legislation that can make it harder for anyone to qualify for this status.

There are major reasons why a good number of people have gone bankrupt. In the first case, medical expenses have been perceived as the major cause of this condition; this especially happens to those who have not been insured.  Where there is a medical emergency, it becomes difficult because there are no ways in which the funds can be raised to offset particular bills.  Another major cause of bankruptcy is through the loss of a job.  This could be through termination, lay off or simply resignation.  This can be so devastating when it comes without any prior notice.

When one lacks the emergency fund, they will tend to rely on the credit cards to do every form of shopping as well as the clearing of the bills which can lead to disastrous returns because in the long run the interest rates will be much higher than expected.  Those who lack jobs for a significant part of time are also likely to suffer; it is therefore very important to plan for everything beforehand so that such misfortunes don’t arise.

Bankruptcy can also arise when people are addicted to the use of credit cards.  Those who have no control over their spending will particularly have a rough time.  The bills will eventually go out of control and will make it impossible for the minimum payments that are supposed to be made.  When the person cannot access the debt consolidation loan, then the sad fate of bankruptcy will crop in.

In some cases, the home equity loans can act as a remedy, especially for the unsecured debts, though people who are irresponsible in their payments can still have a foreclosure when they fail to make the payments on time. Luckily, bankruptcies & forclosures can still be deleted off of credit reports. Read this section on cbe group scam to find out more!

Marital dissolutions are also a major cause of bankruptcy; the fact that legal fees have to be paid is in itself a disastrous move as it will drain most of the finances.  There are also some ongoing costs that are supposed to be catered for especially after the divorce and these will eventually result in a financial ruin. There are also other costs such as the upkeep of a child. There are some spouses who fail completely to support the needs as dictated in the agreement and this will eventually lead to a fall financially. This usually happens when a partner was not well prepared for divorce.  There are times when property can be lost through theft unexpectedly.  There are some other natural cases like floods, earthquakes, and it can be trickier when the owner is not insured and this will most likely lead to bankruptcy.

Natural occurrences are unavoidable, but again this is what makes it important for everyone to be insured because if not, there is no compensation for the same, and this means the victim will be at the mercy  of the circumstances and therefore  become an easy prey to bankruptcy.  When proper financial planning is done, this problem can be managed;  for anyone who contemplates the possibility of being declared  bankrupt, its better to consult a  financial planner or simply a credit counselor  so that they can prepares them in good time before everything gets downhill. In many cases, bankruptcy has never been a choice to many, but if precautions are not taken in good time, the sad reality can happen to anyone anytime.

Its always better to have everything done in moderation especially when it comes to spending so that one can always plan in accordance to his or her financial capacity. This is the wisest thing that anyone needs to do.  In many cases, there are ways to prevent bankruptcy and much information can be sought from the financial experts.