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How bankruptcy can alleviate medical debt consequences

As the old adage goes, health is wealth. Unfortunately for many Americans, including some in Tennessee, the medical expenses and debt incurred to maintain health are making them worse off financially. One recent research project conducted by the Georgetown University Health Policy Institute and Kaiser Family Foundation found that one-third of Americans now have trouble paying their medical bills or getting out from under medical debt.

Medical debt can affect even those who have medical insurance or healthcare coverage. Unfortunately, this unsecured debt can profoundly affect someone's daily life and can come with serious long-term financial consequences. For these reasons, Tennessee residents should make themselves aware of the different options available to help them manage and eliminate such debts.

Many financial experts argue that people can avoid or reduce medical debt if they negotiate with a hospital or healthcare provider to find a price that is reasonable. For example, they can ask providers whether they are willing to accept the Medicare costs of coverage for treatment. Being aware of treatment costs and how much insurance will pay before service is provided can help an individual create a workable payment plan.

When it comes to the bills they receive, patients should check carefully to make sure there are no billing errors and that the charges are only for the treatments they receive. Patients should also be careful about paying medical bills with credit cards, including medical credit cards, because these accounts usually have high interest rates that can mean big charges over time.

More importantly, medical debt can be alleviated through a personal bankruptcy filing. Declaring personal bankruptcy can eliminate a debtor's legal obligation to pay debts incurred from medical bills. An individual bankruptcy can also establish a payment plan to repay debt while maintaining possession of automobiles, homes and personal savings.

Source: Your West Valley, "Study: Medical debt problems afflict 1 in 3 Americans," April 27, 2014

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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