The pain doesn't always stop after you make it home from the hospital. Your body may feel fine, but deep down your mind continues to stir with the stress of mounting medical bills. After paying for your trip to the ER, the abundance of tests, consultations, supplies, room, hospital staff, plus the doctor's bill, your wallet is done for. Fortunately, there are a number of things you can do to prevent, reduce, or even eliminate your financial headache.
Solutions to your Medical Debt
- Get health insurance. This is the most basic step to helping prevent outrageous medical bills. If your employer doesn't provide insurance and you're not otherwise covered, you may want to consider registering at the Healthcare.gov Insurance Marketplace to keep costs down in the future. However, between high premiums, deductables, out of pocket limits, and even limitations on coverage, sometimes health insurance simply is not adequate to cover all the mounting expenses. In fact, having health insurance can sometimes give individuals a false sense of security. Make sure you review your insurance plan to ensure it provides a good safety net, even in 'worst case scenarios.'
- Use state or federally funded medical assistance. If for any reason you cannot afford a great insurance plan, there are numerous resources available intended to help people from all walks of life. Instead of attempting to scout out and sift through the hundreds of programs that exist, head on over to Benefits.gov to see the packages that you may be eligible for. In a recent report, they announced providing more than $89 million in annual benefits.
- Request a discount from your health care provider. Most hospitals and doctors would rather take a portion of the amount you owe rather than hiring and paying a collector to harass you for the money you don't have. By comparing competitor prices, offering a large sum of money up front, or even using the Healthcare Bluebook as a reference you can ask for discounts you wouldn't normally receive. Most health care providers also provide extended payment plans. Remember: asking is easy and can't hurt!
- Establish a budget moving forward. Once you've reduced your debts to something a little more manageable it's time to put a plan into place for the future. Make a list of all your expenses each month and track them. There are excellent free tools available such as Mint that make this process easy-peasy. By putting everything side-by-side you'll see where you can tighten up. Then simply write out some reasonable goals and stick to them! It's best to review your budget every month. Having a budget is vital to putting some money away, which leads us to our next item...
- Create an emergency fund. You never know when disaster may strike, either through a medical event, job loss, home repairs or even natural disaster. And with CNN reporting 76% of Americans living paycheck to paycheck, an emergency fund can be vital. So don't be caught unprepared - ensure you allocate money towards an emergency fund for similar events in the future. If you feel like you're unable to afford putting money away due to seemingly endless bills, you may need to consider eliminating your debt through an alternative means such as medical bankruptcy.
Medical Bankruptcy
Bankruptcy was designed to provide hope and relief to those in unexpected and unfortunate situations, like dealing with medical events. In fact, CNBC reports that medical bills are the number one cause of filing bankruptcy, affecting nearly 2 million people each year. One of the reasons people choose bankruptcy over other options is because of its potential to wipe out almost any debt. Bankruptcy laws are also designed to protect your property, so in most scenarios you don't have to worry about changing your way of life. There are two bankruptcy related options for eliminating the debts, medical or otherwise, that you've accrued.
Chapter 7 Bankruptcy
Filing for a chapter 7 bankruptcy is usually the quickest path to becoming debt free. A chapter 7 is typically best for those earning a modest income and that own assets with limited equity. Once your papers are filed, federal law provides you with protection from your bill collectors and any legal actions, such as foreclosure, repossession or wage garnshment. Typically within 3 months, the court 'approves' your case and your debts are wiped away.
Chapter 13 Bankruptcy
In certain instances, you may be ineligible to file a chapter 7; this can generally be attributed to a high level of income, property, or possessions. Chapter 13 bankruptcy essentially forces your creditors and bill collectors onto a payment plan that you can actually manage. This payment plan lasts between 3-5 years, at the end of which time the remainder of your debt is discharged (eliminated). The court manages your payment plan, so you won't have to deal with aggressive debt collectors and legal actions. Chapter 13 bankruptcy often results in debtors paying back a small fraction of what they owe while keeping most, if not all of their assets.
Determine The Solution For You
Don't beat yourself up if you feel like you're in a financial rut - sometimes life just happens. What you should do is take charge of your situation. Where are you, where do you want to be, and what does the path to get there look like? If you think bankruptcy may be an option for you, call Lincoln Law today for a free, no obligation consultation. We'll evaluate your financial options and see if Bankruptcy could be the cure for your medical woes.