If you or a family member recently experienced a serious illness, chances are you are facing exorbitant medical expenses. Sadly, this is something that very few people are prepared to handle. Even those with the best of insurance can find themselves with debts that they have no idea how they are going to pay off. If you are in this situation, you have three main options. You can file for bankruptcy; negotiate the debt, or attempt medical debt consolidation.
Most people are surprised to find out that some 60% of all bankruptcies are the direct result of illness and medical expenses. What is even more shocking is that the vast numbers of people who file a medical bankruptcy actually do have insurance. If you are considering filing for bankruptcy protection there are a few things that you will need to consider. The first is that at the present time, there is no such thing as a true medical bankruptcy. This means that all medical bankruptcy rules are the same as a standard bankruptcy. All of the current laws concerning eligibility for filing a Chapter 7 will apply to you. You should also know that a bankruptcy will seriously impact you for at least the next 10 years.
Debt negotiation is an idea that has increasingly become popular in the current economy. This is where you and the creditor enter into an agreement through which they agree to accept less than what you owe them and count the account as paid in full. You should know that while the impact will not be nearly as severe as it would have been had you filed for bankruptcy, it will seriously impact your credit.
Your last option is medical debt consolidation. This is where you go get a single loan and use the proceeds to pay off your existing debts. The major down side to this option is that most of the time you cannot do this without using the collateral in your home. Anytime that you consider putting your home at risk, you need to think through this decision very carefully.