Most Mississippians know that large medical bills can cause serious financial problems. However, even small bills of less than $1,000 can be sent to collection agencies and end up as negative entries on credit reports. In fact, a recent study published in Health Affairs found that more than half of medical collections in any given year are for less than $600. More than 2 percent of adults also had medical collections of less than $200 on their credit reports in 2016.
Even though older people have more medical problems, young people are more affected by medical debt, according to the study. Men and women in their late 20s are three times as likely to have a medical bill sent to collections than people in their late 60s. One cause of this is Medicare, but research also shows that medical debt declines as adults get older before being eligible for Medicare.
Advisers recommend that people take action with their medical bills when they first arrive to avoid a negative impact on their credit reports. Billing departments are often willing to work with patients to get bills paid in full before they go to collections. They can provide flexible payment plans or connect patients with sources of discounts or charity.
Individuals facing medical debt can experience a lot of financial stress, but relief is available. A law firm that focuses on giving fresh starts to people with financial challenges related to medical care may be able to provide a variety of solutions. There are counseling services, repayment plans, debt consolidation and even loans. In some cases, it may be in the best interest of a client to take advantage of bankruptcy protection.
Debt is a problem for most millennials in Mississippi and in other states. In 50 large cities across the United States, millennials are carrying an average of over $23,000 in personal debt excluding mortgages. San Antonio is the area with the largest average non-mortgage debt for millennials at $27,122 followed by Pittsburgh and Austin.
Student loans account for the largest proportion of debt in the U.S. for individuals age 22 to 37 followed by credit cards. Car loans are another major source of debt for millennials. One problem faced by many is that even in areas where the cost of living is low, wages are also lower.
Another problem that many young adults face when they are taking out loans is that their credit histories are not usually very extensive. Loans may end up costing them more because of a low credit score.
Some loans may be difficult to avoid. For example, most people need a car to get to and from work, so taking on a car loan may seem like a necessity. When juggled with student debt, credit cards and other personal loans, millennials in most major cities are finding debt difficult to manage.
Many debtors are turning to bankruptcy in order to stop repossession, creditor calls and wage garnishment. A bankruptcy attorney may be able to assist debtors who have fallen behind on their payments by filling out paperwork, providing legal advice and attending a meeting of creditors with the debtor prior to the final discharge of debt.
Most individual debtors choose to file a Chapter 7 bankruptcy, which can wipe out unsecured debts. Debtors who do not qualify to file a Chapter 7 may be able to file a Chapter 13 bankruptcy, which requires that payments be made for several years. An attorney may be able to help clients who are contemplating bankruptcy decide if it is a good solution for them.
Baby boomers in Mississippi who always dreamed of early retirement might have to get used to the idea of late retirement or no retirement at all. At least that it is what statistics suggest. More people 55 and older are still working these days, and many who have retired from full time jobs are turning to freelance work to supplement their retirement income. As of 2017, 23 percent of the American workforce was aged 55 or older. The Bureau of Labor Statistics estimates that the figure will be a solid 25 percent by 2024.
The 2008 recession didn’t help baby boomers who were planning on a timely retirement, but poor planning could be another reason they are working longer. According to a survey by Bankrate, 58 percent of Americans don’t even know how much money they will need to retire. People are healthier and live longer than previous generations, but that means they need more money in retirement. To supplement their incomes, many people who have retired are doing freelance work. In 2016, more than 25 percent of the self-employed workforce was aged 55 or older, and more than half of those people were 65 or older.
Experts say that saving without knowing how much will really be needed for retirement is not a good idea. They advise workers to plan for retirement by doing the math first. To achieve their goals, some people may need to consider working part time or freelance to supplement their income once they’ve retired.
Older people who are overwhelmed by debt might wind up filing for bankruptcy; in fact, one in seven bankruptcy filers today is 65 or older. Though bankruptcy is the right solution for debt relief for many people, for others, alternative solutions might be better choices. Loan consolidation, an application to pay in installments or defensive litigation are some of the other options.People who are struggling with debt could consult an attorney to advise them on their options.
In the 2017 fiscal year, individuals in the United States filed a total of 767,721 personal bankruptcies in the federal courts. Residents of Mississippi may benefit from learning about some common mistakes people make that may lead them to file for bankruptcy.
For example, overspending with credit cards is a major culprit as many individuals do not have an updated budget that is based on what they really need. Not having a well-developed budget means that individuals are unaware of how much disposable income they have and what they can buy without having to incur any debt. It also means that they are unaware of how much money they can actually borrow and repay within a sensible amount of time.
Another mistake people may make that can lead them into bankruptcy is spending money on certain unnecessary things, such as expensive vacations. Many people may be swayed by peer pressure or constant marketing to make these purchases without determining if they are actually able to afford them.
It is not uncommon for financial institutions to solicit individuals for credit cards. However, many people make the mistake of believing that because they have been solicited for credit they can actually afford to take on the debt and pay back the entire amount. They may also mistakenly believe that simply paying the minimum owed on a credit card debt is sufficient.
A bankruptcy attorney may evaluate the financial circumstances of a client and advise them of the differences between Chapter 7 and 13. In many cases, filing for bankruptcy can give a debtor a new financial start and allow them to retain their personal property.
One of the most vulnerable groups in society when it comes to filing for bankruptcy is senior citizens. This group is increasingly filing for bankruptcy due to a variety of factors, including mounting credit card debt, high medical expenses, and insufficient savings and retirement funds.
Senior citizens facing these debilitating debts and expenses must make a choice about how to overcome their financial struggles. Often without employment to help aid their income, they have few options. However, bankruptcy is a viable choice for many of these people.
Senior citizens and bankruptcy filings
A recent study revealed that since 1991, bankruptcy filings among people age 65 and older have increased threefold. The study suggests that one of the main reasons for this is due to the fact that the government and employers have increasingly shifted responsibility for financial well-being to individuals. That means senior citizens are now facing a range of financial responsibilities that once were covered by social “safety nets” that no longer exist or exist only in part compared to decades ago.
Options for bankruptcy
Although many people view bankruptcy through a negative lens, the truth is that this option can be one of the most effective choices for a senior citizen facing overwhelming medical debt, credit card debt or other financial hardships without recourse. Two types of bankruptcy are available to individuals: Chapter 13 and Chapter 7. Each type has different requirements, and the one a person chooses depends on her or his individual situation.
In a Chapter 7 bankruptcy, the individual does not have to file a repayment plan, as with Chapter 13. Chapter 7 discharges unsecured debt such as credit card debt. A Chapter 13 bankruptcy is suitable when a person has the ability to repay through debt reorganization. In Chapter 13, an individual can save his or her home from foreclosure because the repayment plan gives the individual an opportunity to catch up on missed mortgage payments.
If you are a senior citizen facing unmanageable debt, you should not ignore your situation, nor should you feel shame about it. The important thing is to know that you have options and that you can take proactive steps to begin building a stronger financial future.