Medical bills contribute to rising credit card debt
Some Florida residentsmight be struggling with credit card debt because of medical expenses. Medical debt is the number one reason that people file for bankruptcy, and it is not a cost that is easily controlled. Unlike downsizing a residence or cutting back on spending, if a person needs a medical procedure, there is usually little choice but to go through with it.
Furthermore, medical costs have increased more than 30 percent in the last 10 years, and income has not kept up with this increase. Even people with health insurance may be affected, due to high deductibles. Nearly 30 percent of people struggle to pay medical bills, and 37 percent have put medical debt on their credit cards. Unfortunately, once medical debt is added to a credit card, interest on it may mount and make it more difficult to pay off.
There may be alternatives in some cases to using a credit card to pay off medical debt. Some medical providers may offer a payment plan, and this may come with low or no interest rates. Another possibility is setting up a health savings account, which is also tax-deductible. People should also try to create an emergency savings account that contains expenses for at least three months.
Unfortunately, medical procedures can be so costly that even these types of accounts can be quickly wiped out, and not all medical providers may offer payment plans. A person who is struggling with medical debt may want to talk to a lawyer about filing for bankruptcy. A Chapter 13 bankruptcy allows people to work out a payment plan and keep their assets. While bankruptcy damages a person’s credit report at the outset, unpaid debt also has consequences as well. After filing for bankruptcy, consumers can start to rebuild credit with secured credit cards and by paying off any bills on time.