On the face of it, declaring bankruptcy to overcome medical debt seems like a feasible option. However, no financial expert in the right frame of mind will ever advise you to go in for such a solution. This is because there are many complications and problems involved as far as medical bankruptcy is concerned.
The simplest and most effective argument against bankruptcy is that this option has been used by a large number of individuals over years. Yet, neither has medical debt come down nor instances of bankruptcy have come down. In such a scenario, it is obvious that bankruptcy is not the right solution to overcome this problem.
There are many persons who file bankruptcy with the promise that they will never ever opt for a credit card again. They lose all desires of buying a house, owning an asset, going on vacation, using credit cards and doing all other things that we all love to do. If you are one such person and if you do not feel the urge to utilize the credit as others do, you can easily survive despite filing for bankruptcy.
You can earn your income and spend within your limits and lead your life in a happy manner. However, you cannot make a promise not to fall ill ever again, can you? Even if you declare medical bankruptcy, you will still end up with medical debt the later date when some other family member falls ill. The point is that the medical debt is recurring in nature.
You never know when you will fall ill but it is certain that the person who lives 60 to 70 years on this planet will fall ill on a regular basis. In such a scenario, you should opt for a solution that is more productive and more lender-friendly. If you start declaring bankruptcy again and again, medical service providers will simply refuse to treat you.
They may not have the right to refuse in an emergency but they do have the right to refuse if you are not suffering from a medical emergency. In such a scenario, opting for debt settlement makes a lot more sense.
A 50% to 70% waiver combined with a promise to repay the balance in installments keeps the lenders as well as the borrowers happy. In this case, the hospital service provider as well as the individual, that is you, will get a solution that helps both parties win.
Source by Vikram Iyer