There are many different reasons residents of New Jersey and the rest of the nation file for bankruptcy, but research shows that a particular type of debt is now the leading cause of consumer bankruptcy filings. Medical debt is now the most common reason American consumers are filing for bankruptcy, and more than half of all modern bankruptcy filers report having significant debts in this area.
According to Fox Business, one in five Americans currently has medical bills in collections. Once medical bills make their way to collections, it may become even more difficult for American consumers to pay them off, because they may face fees and interest on top of the amounts they already owe. Americans facing mounting piles of medical debt may want to consider the following.
Trying to negotiate with creditors
Some patients may be able to reduce how much medical debt they have by trying to negotiate with medical care providers, either on their own or with the help of patient advocates. Some patients are able to get discounts in exchange for paying off a large medical bill at once. It is also wise for patients to comb through their billing statements to make sure there are no errors or overcharges.
Filing for bankruptcy
For some consumers with considerable medical debt, filing for bankruptcy provides a chance for a fresh financial start. However, filing for bankruptcy may have long-term implications in other areas, so it is important that consumers understand what they are getting into before making any final decisions.
Consumers who do try to overcome medical or other debts through filing for bankruptcy typically do so through either Chapter 7 or Chapter 13 formats.