An unexpected job loss may bring devastating financial conditions for many Tennessee residents, and the circumstances are often worse for individuals requiring medical treatments. For those employed, the effects of getting sick may also result in long-lasting financial damage.
Employer-sponsored health care plans generally provide for a range of medical treatments, although they do not cover the time off needed to recover from an illness, surgery or a procedure. Most employees rely upon their health insurance, but after a period of not working, the out-of-pocket medical payments can pile up on top of the existing household debts.
When the ability to pay medical bills along with the regular monthly expenses becomes an increasingly impossible task, declaring bankruptcy may help with finding relief from aggressive creditors. Nearly 600,000 individuals across the nation filed for personal bankruptcy protection due to medical debts, as reported by NewsChannel 5. Many reportedly could not pay a $400 medical bill as soon as it came in the mail.
Medical debts sold to third parties complicate matters
Hospitals, physicians and medical treatment centers sometimes sell patients’ unpaid bills to third-party debt collectors. When the third party realizes that an individual may not be able to pay the bill, it may then sell it to another debt collector. Even when an individual returns to work and attempts to catch up on his or her debts, coming to a workable agreement with a debt collector could seem like a lost cause.
A third-party debt collector may not accept the same terms and conditions that the original creditor, such as a hospital, originally set up with a patient. The debt collector may also add on additional fees and interest for creating a new payment plan. As reported by CNBC, medical circumstances are the number one reason for individuals to consider bankruptcy filings.
Financial hardships related to health care affect millions of Americans
During the year 2019, approximately 137 million individuals across America experienced financial hardships because of medical bills. If a savings account or retirement plan is not available to cover debt emergencies, overburdened individuals may seek legal means to find financial relief.