Michigan residents may be aware of reports stating that the majority of bankruptcy filings stem from medical debts. In many cases, medical debt is brought about by emergencies such as car accidents and/or unanticipated and unavoidable surgical procedures. When those medical debts are handed over for collections, many people work very hard at getting them paid off over time. However, realizing that the record of the debts in collections will remain on your credit history -- even if settled in full -- may be demoralizing.
Although medical debt is often unanticipated and out of the control of the patient, bills still arrive and have to be paid. Medical debt remains a significant concern for many residents of Michigan who have to face the consequences of their medical treatment while trying to recuperate. There are some misconceptions about medical debt that may adversely affect consumers.
Michigan consumers may share the concerns of many about the negative effect medical debts have on their credit scores. Medical debt is mostly unanticipated, and many consumers feel that it should not be treated in the same way as other debts. The company who creates the widely used FICO scores, Fair Isaac Corp., announced that there are imminent changes that will become effective soon.
It is reported that a third of American adults have unpaid medical debts that are causing financial anxiety. Michigan residents who are desperate to find a way to manage medical debt may find comfort in knowing that there are ways to go about obtaining possible reduction in charges or extended payment periods. It is interesting to note that it is not only uninsured people experiencing overwhelming medical debt, but also those who have medical insurance.
Michigan residents may be interested to learn that failure to pay medical debt can negatively affect their credit reports without them even being aware of the debt. Because medical debt is not like a loan where an individual knows in advance what his or her commitment will be, it is quite possible for an unsuspecting patient to be unaware of separate amounts that are charged. A man in another state recently related his predicament when he applied for a credit card, responding to a zero percent interest offer. The application was declined because of an outstanding medical debt that dated back to 2012.
Michigan consumers may be aware that research suggests that one in every three Americans is having difficulties in paying medical debts. With medical debt in collections affecting credit scores, many consumers find it almost impossible to secure loans, or credit for buying large items such as cars. Even once medical debt is settled, if it was in collections, it still has a negative effect on an individual’s credit score.
Medical debt can be the cause of severe anxiety and could have detrimental effects on the financial stability of an individual or a family. Some Michigan residents may not realize that people of any income group can find their medical debt to become overwhelming. It has also been reported that this problem does not only affect those without health insurance.
When Michigan residents are injured or have an illness requiring medical care, they are likely to face overwhelming medical bills. A survey showed that a quarter of American families found it difficult to settle their medical accounts in 2012. It also indicated that one family out of every ten had medical debt that they would be unable to pay.
Many people in Michigan and elsewhere have to pay for some medical costs out of pocket. According to a recent study by the Henry J. Kaiser Family Foundation, medical debt is an issue faced by both the insured and uninsured. In fact, the study reveals that the majority of people who struggle to pay their out-of-pocket expenses actually have health insurance plans. Unfortunately, it is often difficult to get rid of this type of debt.
Bankruptcy is a fact of life for many Michigan residents. It has allowed them to regain control of their finances and eliminate large swaths of their debts, including credit card debt. Another large source of debt is medical debt -- an issue which often compounds upon itself if a person is out of work as a result. Medical debt can easily multiply when it goes unpaid -- and can be referred to collection agencies.