Going to the doctor is sometimes a necessary evil. While we certainly appreciate the medical care we receive when we are seriously injured or ill, this care comes at a price –medical expenses that we simply cannot afford. The problem is only compounded if you lost your job and are without health insurance altogether. It is easy to see, then, why medical debt is a growing problem in New Jersey and across the U.S.
How big is the medical debt problem in the U.S.?
Millions of unemployed individuals in the U.S. are struggling with medical debt. According to one analysis, almost 20 million Americans are carrying a total of $45 billion in medical expenses that are currently in the debt collection process. Being harassed by debt collectors when you are already in poor health can add anxiety to an already stressful situation. Moreover, almost 50% of people in the U.S. do not have even $400 saved in the event of an emergency, meaning they simply have no means of paying back what they owe in medical debt.
Chapter 7 bankruptcy can help people address medical debt
One option that may be worth considering if you are drowning in medical debt is applying for Chapter 7 bankruptcy. While bankruptcy has a negative reputation in some circles, it can actually be a successful means for addressing debt that has grown out of control, providing debtors with the fresh financial start they need moving forward.
In a Chapter 7 bankruptcy, a debtor’s unexempt property will be sold — a process known as “liquidation” — and the proceeds will be used to pay the debtor’s creditors. Once this process is complete, many (but not all) of a debtor’s remaining financial obligations will be discharged. Not everyone qualifies for Chapter 7 bankruptcy, however, so those who are interested in it may want to first seek legal advice before proceeding.