No matter how much you save or plan, sometimes there are unpredictable costs in life. Finances are hard, and some of the most expensive things in life are also the hardest to see coming. Unexpected medical costs can change your financial outlook overnight, whether from an accident or a diagnosis. A study by the National Bureau of Economic Research found that 19 percent of Americans would be unable to come up with $2,000 within 30 days if an emergency arose.
Medical bills are some of life’s largest expenses and they are a common reason why people file for bankruptcy. A medical condition that requires recurring treatment costs thousands of dollars. Insured or not, those expenses are hard to cover for the majority of the population. For some, bankruptcy may offer a solution.
Looking for relief
When you’ve experienced serious health issues, financial worry is an added concern. If debt is too much of a burden, bankruptcy offers relief from creditors and a chance to start over. While it is never a first choice, the purpose of bankruptcy is to provide a path forward from a seemingly hopeless situation. The principle idea is solution, not shame.
It’s true that bankruptcy will hurt your credit score. While it will have an effect on your credit rating in the short term, a credit rating is always changing. After filing and alleviating debt concerns, it’s possible to rebuild without taking a lifetime to do it. Responsible use of credit cards and the timely payment of bills goes a long way toward building your score back to a respectable level.
Different bankruptcy options
There are many types of bankruptcy, including Chapters 7, 11 and 13, each with distinct forms of debt relief, payment plans and restrictions about your property. While there are many online resources about the different options, the best way to know what works for your individual situation is to talk with an experienced attorney who can answer personal questions and help create a plan for you.
If medical bills or another unexpected issue has changed your financial picture, it’s important to explore every option available to relieve the burden.