The American Medical Association has stated that Americans face skyrocketing medical costs in 2019. More than 11 million people may no longer be able to afford health insurance, resulting in financial crises that often lead to medical bankruptcies and foreclosures. Meanwhile, as insurance rates increase, so do medical bills, hitting families with aging, chronically ill or disabled members with a double-edged sword.
How Unpaid Medical Bills Can Lead to Bankruptcy
The repeal of Obama care lifted the requirement for every person to have health insurance. Although many people hated Obama care, it served a purpose. All health insurance works under mathematical assumptions based on how many healthy people buy insurance to support sick people. With healthy people opting out of skyrocketing insurance costs, rates take off too. So, the politically popular repeal of Obama care effectively sabotages insurance rates.
When the financial crisis hits critical mass, people stop paying their mortgages. This also cripples investment in working-class neighborhoods as clusters of foreclosed homes lower property values and disrupt the operating income and profitability of construction and investment firms in the area. In Nevada, foreclosure mediation is now mandated by law, so homeowners have the opportunity to negotiate with a lender before the lender is allowed to proceed with a foreclose on their property.
Why People Choose Foreclosure to Deal with High Medical Bills
In both Chapter 7 and Chapter 13 proceedings, medical debt is defined as unsecured debt, which can’t be tied to collateral such as your house car. Medical debt is not a priority as is child support or tax bills. Instead, medical debts, unprotected during bankruptcy proceedings are a last priority. The institutions holding your medical debt know this and try to collect their money before you can claim bankruptcy. This is expected to increase the number of bankruptcy foreclosures in the coming year.
Options to Foreclosure
For those with high medical expenses, there are other options to consider prior to foreclosure and bankruptcy. A loan modification can change the mortgage terms, particularly the interest rate, to make payments affordable for families with high medical and other debts. Additionally, loan litigation can resolve mortgage issues if a lender acted irresponsibly or illegally at any time. Some homeowners facing exorbitant medical bills choose to do a short sale, if they owe more than their property is worth. Seeking legal advice helps beleaguered homeowners make the best choice.
Seek Legal Advice
According to Attorney Taylor Randolph of Randolph Law Firm, P.C. “When financial difficulties have you stressed and uncertain, it’s probably time to enlist the help of an attorney who can help you find the right solution.”