In this series of three articles, we’re going to talk about three of the most common reasons people find themselves deeply in debt.
But first let’s address the elephant in the room. There is a very common stereotype out there that people who accumulate a lot of credit card debt or file bankruptcy are just reckless spenders who always buy the latest gadgets, clothes and dine out a lot. While those activities can certainly lead to debt problems, in reality, the causes are much more complex. Reckless spending can sometimes be an issue, but it’s these other three causes that we see much more frequently. In fact, most people that have serious debt problems are just good people who have gone through some unforeseen circumstances in their life.
Medical Bills Can Cause Bankruptcy
Out of control medical bills is one of the leading causes of bankruptcy. It’s also a way that people can incur substantial credit card debt. This is because most medical providers readily accept credit cards for payment.
When you or a loved one is diagnosed with serious illness, your mind goes into survival mode. You have to focus on simply surviving the illness and taking care of your family. Many times, you may not even have much choice in your provider and medical care prices are notoriously murky and difficult to know in advance. Even if you did know exactly how much you would be charged, what could you do with that information? Not much probably. What if it’s the only specialist that can help you? What if you live in a small town and don’t have other choices? What if, what if?
As a result, medical bills pile up. And the collection efforts can get very difficult very quickly. What many people don’t know is that medical debt can be negotiated in many cases. Doctors, hospitals and other providers lose revenue to default and bankruptcy frequently, so they are often more willing than you might think to negotiate. However, they have to have some motivation to compromise.
A skilled debt negotiation attorney, especially one who can make a credible threat of bankruptcy can be of great help. Let us go through your debt situation and come up with a game plan. You might be able to avoid bankruptcy altogether. It’s best to have this evaluated early on before the collection efforts get out of control. If you avoid the issue, you could end up with judgments and garnishments against you, making bankruptcy more likely.