For many American families, life is good. The parents have good-paying jobs; the family lives in a large house in a desirable neighborhood with a couple of nice cars in the garage. Every year, they take a couple of great family vacations with plenty of photo opportunities.
Like most families, the house has a mortgage, the vehicles have lease payments and credit cards are used frequently during those vacations. Still, it’s possible to keep up with all the expenses with a little left over to save. But what happens when the unexpected occurs, and a family member becomes ill or seriously injured?
An invisible weight pulling you under
Millions of Americans are dealing with medical debt. Even if they have good health insurance, the deductibles and co-pays can quickly add up. And the consequences can affect almost every part of your life, such as:
- Damage to your credit score. The Consumer Financial Protection Bureau (CFPB) finalized a rule that would remove medical debt from your credit score. It was set to take effect in March 2025, but it’s currently pending due to a lawsuit challenging the rule.
- If you used credit cards to cover medical bills, high-interest charges can cause your balance to snowball into thousands of dollars quickly.
- The strain of medical bills, combined with other living expenses, can cause family stress and lead to arguments.
If you feel overwhelmed by medical expenses, your first step should be to review each bill thoroughly. Billing mistakes occur more often than people realize. Incorrect procedure codes or double charges can inflate your costs. If something appears incorrect on your statement, please contact the billing department and request a corrected bill.
You can also negotiate your medical bills. Many healthcare providers and hospitals are willing to work out payment terms or reduce your bill if you ask. Explain your situation and see if you and the billing department can come to a mutually agreeable arrangement.
For medical debt, bankruptcy shouldn’t be your first choice, but it may be your only option. Filing for Chapter 7 or Chapter 13 offers you a way to eliminate or restructure your debt. Before making any decisions regarding bankruptcy, you should speak with someone who can review your situation and help you determine if bankruptcy is your best choice for a clean start free of significant medical debt.
