Medical bills are a common reason why individuals throughout Virginia and the rest of the country file for bankruptcy. A TD Ameritrade study found that it was the most common reason why a person may consider liquidating a retirement account. However, it may not be wise to take a loan or withdrawal from such an account. This is because individuals could have to pay off the balance of their loans if they lose their jobs or switch employers for any reason.
Furthermore, those who take a withdrawal prior to age 59½ may have to pay an early withdrawal fee in addition to income tax. A person may be able to negotiate the cost of medication or surgical procedures before any treatment plan begins. It may also be possible to negotiate the price of services rendered after an invoice has been submitted. Patients should review their invoices to ensure that they are correct before making a payment.
Hospitals may be willing to forgive an outstanding medical debt or write it off as a charity case. Those who are required to pay a portion of their debt may be able to put it on a credit card or take a personal loan. Individuals who choose to borrow money to pay down a debt balance are encouraged to comparison shop. This may make it possible to find the loan with the lowest interest rate.
Filing for Chapter 7 bankruptcy may make it possible for a person to have medical and other unsecured debts discharged in a matter of weeks or months. In some circumstances, someone may be able to get his or her debt discharged without having his or her assets liquidated. Other advantages of filing for bankruptcy may include a ban on collection activities, such as a repossession or foreclosure, as well as an automatic stay of creditor contact.