When people think of personal bankruptcy, they often imagine a person who live beyond their means, throwing elaborate parties in the Hollywood Hills or dining out at expensive French rooftop bistros. According to a USA Today article, the real No. 1 reason so many Californians and others file for personal bankruptcy is due to medical bills. With the aging population of baby boomers living longer, it's no wonder people experience financial hardships. So, how do you get a clean slate and then prevent a future problem? Experts say some people feel tempted to give up their health insurance after Trump lifted the mandate that everyone buy health insurance or pay a penalty or fine. USA Today points out that 40 percent of people had debt because of medical issues in 2014. In 2016, an estimated 20 percent of people under the age of 65 who did have health insurance still had problems paying their medical bills. Most of those struggling had to tap most or all of their savings or take on a second job.
Building up an emergency fund
For medical expenses, there are several ways to go about building up an emergency fund. Oftentimes, it's easier to contribute to a health savings account because of the tax benefits. But if you don't want to worry about the tax issues, bookkeeping or accounts, consider a simple savings account. Experts say 69 percent of people have less than one thousand dollars saved up. Some people save money for more glamorous purposes such as an exotic vacation or a home renovation. But saving up for practical issues such as medical bills reduces stress and buys you more time in terms of health and longevity.
Consulting with a bankruptcy attorney
Before casting your medical bills off to the side, consult with a personal bankruptcy attorney in California. Experts point out that a bankruptcy is a black mark on your record. At the same time, there are different kinds of bankruptcies that could make a difference in your personal situation. After filing for Chapter 7 or Chapter 13 bankruptcy, make sure you pay a higher premium for more comprehensive health care insurance. Find a plan that gives you lower copayments and lower deductibles. Don't put your health at risk due to financial concerns. Remember, if you neglect medical or hospital bills, your medical provider will not simply send late-payment notices. They may sue, which results often in wage garnishment and a dint in our credit even without bankruptcy to protect you.
At the Law Offices of James C. Shields, we help clients with medical bills and debt figure out the best way of addressing the financial challenge with minimal damage to credit. Talk to us about the different kinds of bankruptcy. We also provide help with estate planning and probate. For more information about overcoming medical debt in Los Angeles and Orange County, California, please contact us.