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Most common medical conditions that lead to debt

On Behalf of O’Brien Law Firm, LLC

Posted on: August 17, 2022

Medical bills are a significant source of debt for many American households. In the United States, health care costs are behind more than $88 billion of consumer debt.

Any hospital visit or emergency treatment can quickly become a financial nightmare, but certain medical problems are more costly or require more frequent care than others.

Ongoing treatment for specific diseases and chronic pain

Most medical debt comes from specific diseases and conditions such as heart disease or gastrointestinal problems. Costly treatment is a major reason why so many Americans choose to reduce debt burdens by filing for bankruptcy.

As with specific diseases, chronic pain and injuries usually require ongoing treatment, and medical bills can add up for a long time.

One-time medical expenses

When the unexpected happens, such as a car accident or a broken bone, medical debt is often the result of turning to credit cards without any other options.

Surgery, both emergency and planned, is among the most costly one-time medical expenses. Whether it is the knee, back or another type of surgery, these procedures often cost more than average-income households are ready to take on.

Dental issues

For some individuals, teeth are a top concern leading to high medical debt. Because many people do not have adequate or any dental insurance, they may have to cover dental expenses out of pocket.

According to research by the Kaiser Family Foundation, other top medical conditions that lead to debt include mental health issues, pregnancies and infections such as pneumonia and the flu. Whatever the reason for high medical debt, struggling adults should know that there is help out there.

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American medical debt statistics

On Behalf of O’Brien Law Firm, LLC

Posted on: June 16, 2022

America has a growing medical debt problem. The United States Census claims that 19 percent of households cannot afford medical care.

The Census also says the median amount of debt was $2,000. Medical debt is particularly devastating because it often leads to bankruptcy and the forced neglect of other medical treatments.

Education is a risk factor

Some factors influence the likelihood of medical debt. Education is the largest corollary to unpaid medical bills. Over 26 percent of households without a college degree suffer from some level of medical debt. However, education above a bachelor’s degree does not necessarily decrease the likelihood of debt.

Poor health creates spiraling debt

Individuals with fair to poor health have a much greater rate of medical debt. Still, over 14 percent of healthy households cannot pay for medical bills. These families are at significant risk if an unforeseen medical emergency happens.

High medical debt afflicts lower-income families

High medical debt afflicts only four percent of the US population. The Census measures high medical debt as liabilities over 20 percent of a family’s annual income. The primary factor that contributes to high medical debt is poverty. Households that cannot afford health insurance are nearly three times more likely to accumulate high medical debt. Clearly, the combination of poverty, lack of prospects, and poor health create a snowball effect that seems impossible to alleviate.

Medical debt does not have to be a life sentence. Start by educating yourself about the various tools and resources available to people who suffer financial difficulties. Take the first step today, and start working towards a debt-free future.

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3 Ways bankruptcy can benefit families

On Behalf of O’Brien Law Firm, LLC

Posted on: February 16, 2022

You may view the process of filing bankruptcy in a negative light. Filing for bankruptcy is a serious undertaking.

Bankruptcy also provides many benefits to families not available outside of the bankruptcy process.

1. Keep your home

If you are behind on your mortgage payments, you know how hard it is to catch up with the arrears. Lenders add late fees and penalties to increase the amount you owe. An aggressive mortgage holder can start foreclosure proceedings against you to take possession of your property. If the lender forecloses on your home, you will lose the property.

By filing for bankruptcy, you can stop any foreclosure proceedings. As part of your bankruptcy, you can negotiate a way to pay back any arrearage and stop the running on penalties and interest.

2. Stop creditor harassment

If you receive regular calls from creditors trying to collect bills you cannot pay, a bankruptcy filing will stop creditors from calling. Bankruptcy also stops any litigation proceedings creditors may have against you. The only recourse creditors will have is through the bankruptcy court.

3. Eliminate debts

If you qualify to file a Chapter 7 bankruptcy, you can probably eliminate most of your unsecured debt, including credit cards and medical expenses. If you file Chapter 13, you will likely pay a small percentage of the amounts owed to unsecured creditors through one monthly plan payment.

Bankruptcy can provide significant relief for your family if you have overwhelming debts that you cannot pay. After filing, you can start over and change your financial future.

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Handling a credit report after bankruptcy

On Behalf of O’Brien Law Firm, LLC

Posted on: February 6, 2022

Bankruptcy can be a burden in many ways. Even after you pay off your debt and get on solid footing, you still have to worry about creditors reporting your bankruptcy information.

Negative information in your credit reports can affect your financial options in the future, so you should be mindful of the ramifications. At the same, you should not feel as if your bankruptcy will leave a permanent mark.

Your creditors’ rights

For up to a decade, a credit bureau can keep your bankruptcy on your report. Your creditors can also keep negative information such as judgments and lawsuits for up to seven years in most cases. On top of this, if you do not pay some of your tax liens, this information can stay on your record for 15 years. You should keep all of this in mind if a company offers to remove negative information earlier than the standard timeframe.

Your rights

Errors can easily happen in your credit reports and you have the right to bring them into question. For one, the Consumer Financial Protection Bureau is always there if you have a complaint. Also, if you have trouble getting credit with a company because of a report, the Fair Credit Reporting Act entitles you to a free copy of the report (as long as your request is within 60 days). The company that denies you must also provide you with the phone number, name and address of the credit reporting agency.

While a bankruptcy discharge can help you, you should prepare yourself for what may come after. Understanding how credit reports work can help you repair your finances and move on.

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3 ways to take control of your credit cards

On Behalf of O’Brien Law Firm, LLC

Posted on: December 27, 2021

If you have excessive credit card debt, you are far from alone. In fact, in 2020, the average American owed more than $5,000 to credit card companies. This makes sense, as many individuals have little choice but to reach for credit cards to cover both ordinary and emergency expenses.

Having credit cards is a good way to build a good credit score. If you accumulate too much debt, however, your credit cards may work against you. Here are three ways to take control of the plastic in your wallet or purse.

1. Stay within your means

Because many credit cards offer cashback and other types of rewards, it can be tempting to pay with your card. Still, you should not let your credit cards lure you into developing poor spending habits. If you can stay within your means and pay off your credit card balances each month, you are likely to realize some immediate financial benefits.

2. Look for other options

Credit cards often come with massive interest rates. If you are not able to pay off your total balance at the end of a billing cycle, you are likely to pay more for goods and services than they are worth. Therefore, if you have an unexpected expense, it may be wise to look for other financing options. For example, your bank may offer you a loan at a lower interest rate than your credit card.

3. Open your statements

If your outstanding debt makes you uncomfortable or nervous, you may not open your credit card statements. Still, to regain control over your finances, you need to know how much debt you have, how much credit you have left and how much interest you are paying.

Ultimately, if opening your credit card statements causes you to panic, you may want to explore bankruptcy or other debt-relief options.

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