Medical Debt

How Medical Debt Affects Your Credit

Medical debt is a financial stressor for many Americans. A vital medical procedure or trip to the emergency room can set someone back thousands of dollars in medical bills, even with insurance coverage. However, if the patient is not able to pay back these bills, that medical debt can turn into an even bigger problem if it’s reported to the credit bureaus.

According to a study from Families USA, approximately 5.4 million Americans were laid off, losing their health insurance coverage between February and May 2020. This figure is 40 percent higher than the previous recorded annual losses. Without health care coverage, it is safe to assume many of these bills will go unpaid.  

Credit Card Debt, Debt Relief, Medical Debt, student loan debt

Tips for Managing Student Loans, Medical Debt, Credit Cards and More

DMP - Debt Management Plan acronym, business concept background

Consumer debt encompasses several different categories. However, many people often struggle with the same few categories, mainly student loans, medical debt, and credit card debt. It helps to know how to attack the debt individually in each category if a consumer is looking to pay down their various debts.

Student Loan Debt

If you are struggling with student loan debt, you’re not alone. In fact, it has been reported that Americans carry over $1.5 trillion in student loan debt. This figure amounts to an average individual load of $32,731 per student. If the consumer proceeds towards a master’s degree or professional degree following graduation from undergraduate studies, that amount can get into six figures. Paying down that debt can be a struggle for many, especially during recent times. Currently, the federal government has issued a forbearance on all federal student loan debt during the COVID-19 crisis, which has been extended past September 30.

Coronavirus, COVID-19, Financial Advice

When You Should Use Your Emergency Fund

Financial experts recommend that consumers put away a little money every paycheck towards an “emergency fund.”  This money is meant to cover the ‘unexpected expense,’ whether that be a car repair, medical bill, or essential home repair. With the current coronavirus (COVID-19) pandemic and many people losing their jobs, it may be time to utilize your emergency fund.

Financial Hardship

One of the most common circumstances where a person would utilize their emergency fund is in response to financial hardship. The stimulus funds offered by the CARES Act helped for a short period of time, and many landlords, mortgage holders, credit card companies and other creditors have been willing to work with individuals who are struggling to pay their bills as a result of this crisis. However, even with that help, a person may still need to take some money from their emergency savings to pay for bills that need paid. Once your income returns, then begin replenishing the money taken from savings.

Debt Collection, Debt Relief, Medical Debt

How Long Does Medical Debt Remain on a Person’s Credit Report?

After suffering a serious injury or illness, it can be hard to pay the bills that inevitably follow. Considering how many Americans are now facing medical debt in light of the coronavirus (COVID-19) pandemic, many wonder the effects this will have on their credit score and how long the debt will remain on their credit report.

After medical debt has been reported to the credit bureaus, it can remain on a consumer’s credit report for up to seven years. However, a person’s medical debt is not immediately reported to that individual’s credit as soon as it is incurred. It will not be reported to a person’s credit so long as that debt remains with the original service provider. Once a person defaults on the debt and it goes to collection, only then will the medical debt begin to show up on a person’s credit report.

Debt Relief, Medical Debt

How Coronavirus (COVID-19) Testing Could Trigger Medical Debt

The coronavirus has many people worrying about what will happen if they contract the virus. Now that the virus has spread to parts of the U.S., Americans are concerned about whether they should get tested for the coronavirus if they experience flu-like symptoms. Since this virus is relatively new and not completely understood, its testing may not be covered by private health insurance. Out-of-pocket medical costs can cost patients thousands of dollars, if the testing is not covered under their health insurance plan.

Florida businessman, Osmel Martinez Azcue reported experiencing flu-like symptoms after he returned from a trip to China in January. When he began experiencing the symptoms, Azcue went to the hospital to be tested for the virus. One of the tests he was offered at the hospital was a CT scan, which is one of the best methods used to detect the virus. He first went with the simple flu test to rule out the possibility that he was suffering from the common flu, which fortunately is what it turned out to be.  For him, the CT scan was not necessary.

Bankruptcy Law

Timing is Important When It Comes to Filing for Bankruptcy

When it comes to filing for bankruptcy, it is not always a matter of “if” but rather a matter of “when.” Depending on a person’s financial situation, it can pay to properly time out a bankruptcy filing. Whether it is the right time to file for bankruptcy can depend on several factors including whether someone is facing foreclosure, vehicle repossession, wage garnishment, or any of the following.

Mortgage Modification

When someone is facing foreclosure, a few different steps can be taken to delay or even prevent the process. One of these solutions is through a mortgage modification. Homeowners facing foreclosure should try this approach first before filing for bankruptcy.

Debt Collection, Medical Debt

Military Hospitals Aggressively Pursuing Medical Debt

Medical debt collectors can be relentless, and when someone has no money or resources to pay medical debts, this process can be extremely stressful. Recent reports have shown that private hospitals are not the only entities persistently collecting on medical debt. Federally backed governmental institutions, including military hospitals, are some of the worst offenders when it comes to pushing patients hard to pay on their medical bills.

A recent piece in The Atlantic highlighted just how dire the situation has gotten for many individuals. A Texas man, Ricardo Gonzalez Jurado, faced aggressive debt collection efforts from Brooke Army Medical Center (BAMC), a trauma center where he received treatment after sustaining significant injuries on a work site. Gonzalez Jurado did not have the funds to pay his bills in full, so he began a payment plan with the hospital. He kept to the payment plan and even agreed to pay more after the hospital requested higher payments. He later received a letter from BAMC after some time stating that his balance had been paid in full even though he had only paid a portion of the bill at that point. Despite trying to reach the hospital and continuing to send in his payments, BAMC returned his monthly checks.

Debt Relief

Growing Number of Personal Loans Could Mean Danger for U.S. Economy

The rise in personal loan debt has financial experts worried. According to a recent study from Equifax, personal loans are up 10 percent from the previous year. In fact, all three major credit agencies report a double-digit increase in the use of personal loans over the past few months.

More often than before personal loans are being utilized by consumers looking to pay for unexpected or needed expenses. In fact, personal loan debt was reported as being the fastest growing category of consumer debt.

Credit Card Debt, Medical Debt

How to Keep Medical Debt Off Your Credit Cards

With the cost of medical care increasing every year, many Americans are struggling to pay their medical bills. According to a recent study from NerdWallet, medical costs have increased 33 percent since 2009, while the national median household income has only increased 30 percent. To keep up with these costs, many consumers are forced to pay for their medical bills with credit cards. The problem is credit card interest rates can range anywhere from 10%-30% and come with additional fees and costs if timely payment is not made. Medical bills are expensive and paying them with your credit card will only add unnecessary interest fees to your bills.

Here are some tips that can help you avoid having to put medical bills on a credit card.

Bankruptcy Law, Debt Relief, Medical Debt

How the Insured Fall into Medical Bankruptcy

There was a time when having health insurance was enough to assure someone that his or her medical expenses would be adequately covered and that he or she would not fall into debt due to one major medical crisis. However, today’s high deductible insurance plans and skyrocketing medical costs have made it impossible to stay out of medical debt. It is for this reason that so many American consumers are falling into what is called “medical bankruptcy” or bankruptcy due to medical debt.

According to a study published by the American Journal of Public Health, 530,000 bankruptcies are filed annually due to medical debt. Even with coverage offered through the Affordable Care Act, consumers are still struggling to afford their medical bills. A lot of this has to do with the insurance coverage options and healthcare plans offered.