Medical debt is one of the leading causes of bankruptcy; but for some reason this fact has not convinced many Americans to make sure they are fully insured.
Ways that the lack of health insurance jeopardizes your financial health:
- When you don’t have health insurance you tend to avoid going for checkups and could miss the early signs that your health as not as good as it should be. This can lead to bigger problems developing which could have been prevented with early intervention. And as you may have guessed, these bigger problems often come with a bigger price tag that can lead to bankruptcy.
- Americans who don’t have health insurance often depend on credit cards to pay medical bills which is a huge expense. It is much more expensive to pay on medical debt when it’s placed on a credit card. A matter of fact, even if a debtor files bankruptcy, some credit cards companies may try to challenge the charges to the credit card if they were made when the debtor was insolvent and knew they had no way of paying the debt. In this case, some of the medical debt which was placed on the credit card could survive the bankruptcy. On the other hand, if the medical debt is not put on a credit card, it can be discharged in bankruptcy even if the debtor was insolvent when they had the medical emergency.
- While none of us want to rack up medical debt and have every intention of repaying it, medical debt is treated the same as any other debt by debt collectors. They will come after your wages and other assets after medical bills are delinquent for so long. Only bankruptcy can stop unpaid medical debt from morphing into lawsuits and wage garnishments .