Bankruptcy is a subject that is still surrounded by stigma. There is a misconception that people who pursue this avenue have always been careless with money. This is simply not true. While reckless spending can cause financial trouble and it is a factor in some bankruptcy cases, it isn’t for the majority.
Millions of Americans are currently struggling financially through no fault of their own. Medical debt is frequently at the center of bankruptcy cases. How do so many people get into medical debt?
Insurance doesn’t cover everything
The U.S. healthcare system operates on an insurance basis. Thus, it’s tempting to think that anyone with insurance is fully covered, but it is not this straightforward. Insurance coverage costs money, and there are deductibles and restrictions on treatment options too. If the insurance says no to covering a treatment that you need, then there are few options available other than finding another means of coming up with the money.
Far too many people put medical debt on credit cards
As mentioned previously, if insurance can’t provide coverage then there is no choice but to look elsewhere. One option that many individuals choose is credit cards. Credit cards can provide instant access to the required finances. The trouble is paying this back on time. It’s not as simple as paying the amount owed back on a gradual basis, there is also interest added on top, which is often extortionate.