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Before Medical Bankruptcy : Options Can
Salvage Credit
(PRWEB) February 14, 2005 -- Nearly half of the nation’s
1.5 million bankruptcy filings in 2001 were because of
medical costs, despite the fact that 75 percent of people
who experienced “medical bankruptcy” had health
insurance, according to a new study from Harvard Law School
and Harvard Medical School. While medical costs and subsequent
loss of income can cause serious financial troubles, an
alternative to bankruptcy does exist, says Freedom Financial
Network, LLC, a California-based debt resolution service.
| Freedom
Financial Network Comments on Harvard Study Citing
High Medical Expenses as Cause for High U.S. Bankruptcy
Filings |
“Many people don’t realize that bankruptcy
is not the only solution for people who have the type
of financial trouble cited in the Harvard study,”
says Brad Stroh, co-CEO of Freedom Financial Network.
Consumer debt resolution, he explains, is a solid –
but less well-known – alternative. “When medical
costs have run finances into the ground, debt resolution
companies such as Freedom Financial Network work for consumers
to negotiate lower payments to medical providers. Most
of the time, consumers gain significant savings.”
Unlike credt counseling, debt consolidation or debt management
plans, consumer debt resolution lowers actual principal
owed – not only interest rates or minimum payments.
While the crdit counseling industry has come under fire
by the IRS for taking advantage of “non-profit”
status and relying on funding from creditors, debt resolution
serves the consumer credti directly, in a position of
mediation and negotiation with unsecured creditors. For
people who have severe debt trouble caused by medical
expenses – as well as job loss, divorce or other
unexpected events – the result is a less complicated
alternative to getting back on financial track.
Before filing for bankruptcy, consumers with severe debt
from medical problems should consider these options:
1. Plan ahead with insurance –
Before medical costs arise, be sure you have the best
insurance you can get. Some plans now carry lifetime maximums
of $8 million or more. “One tough illness can run
through a $1 million maximum before you know it,”
Stroh notes.
2. Pay critical bills first – The
most important payment to make is your mortgage. “If
you fall behind, you can lose your house,” Stroh
says. “Hang onto your house above all else.”
| "We
can help you save more money than simple Consumer
Credit Counseling while protecting your credit rating
from the harsh impacts of bankruptcy. We think we
have the best solution for consumers with debt concerns,
but give us a call anytime to get a free evaluation
of your options." |
3. Know what you owe – After a
serious medical incident runs up hospital bills or leaves
you without income, collect all your bills to learn exactly
how much you owe. “Don’t waste time making a
plan, only to get socked with a late, huge hospital invoice,”
Stroh suggests. Call the accounts payable departments
of all involved parties – hospitals, doctors’
offices, emergency rooms (which might bill separately
for physicians) – to sum up costs.
4. Choose help carefully – If you
need help to negotiate payments, be sure you are working
with a reputable debt resolution service that works as
an advocate for the consumer, not creditors. Payments
to help resolve your debt shouldn’t add to your overall
debts, and all payments should be clearly spelled out
from the beginning. At Freedom Financial Network, for
example, consumers pay a fee that represents a nominal
percentage of savings gained.
“Filing for bankruptcy can destroy your credit rating
for a decade,” Stroh explains. “Customers with
serious medical bills have been through enough trauma.
They need to understand that they have options to resolve
their debt, with less impact to their credt rating than
bankruptcy.”
Freedom Financial Network, LLC (www.freedomdebtrelief.com)
provides consumer credt debt resolution services through
its Freedom Debt Relief, Freedom Foreclosure Relief and
Freedom Tax Relief divisions.
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