A survey focused on health care costs in New Jersey and across the country found that only 45% of respondents had the money in savings or other sources to cover medical expenses during the prior year. The survey was conducted by Freedom Debt Relief and also found that 42% of respondents had to charge medical bills to a credit card in order to cover them. Nineteen percent had to borrow money from friends or family to cover medical expenses.
Additionally, only 35% of respondents would have sufficient funds in available cash or savings to cover an emergency medical expense costing $2,000. More than half of Americans have medical debts of $1,000 or more, and 10% of Americans have medical debts of $20,000 or more. Failing to pay medical expenses can hurt a person’s credit as much as failing to pay phone or electric bills. Paying medical bills with a credit card is not ideal as the person may incur significant interest charges by paying over time.
It’s a good idea to prepare for medical bills by building an emergency fund. This fund should have enough money to cover living expenses for a period of three months. If that is not possible, people should strive to save enough money to cover the cost of any annual health insurance deductible by tightening budgets and cutting back on things that are not necessary. Money contributed to health savings accounts goes in pre-tax, so HSAs can be a good idea too.
People in New Jersey who are struggling to pay off existing debts might want to speak with an attorney about their debt elimination or debt reduction options. An attorney who handles Chapter 13 or Chapter 7 bankruptcy cases might be able to help by negotiating with creditors or by gathering information and drafting a petition to begin bankruptcy proceedings.