Virginia residents who accrue medical debt may find themselves in a tough financial position. According to one 2019 study, there could be as many as 530,000 Americans who have filed bankruptcy in the United States because of medical debt. The study itself found that 65.5% of the 910 respondents said that they filed for bankruptcy because of financial issues caused by a medical event. Bernie Sanders has cited the survey as part of his pitch to overhaul the American health care system.
Millennials, individuals who were born from 1981 to 1996, are prone to medical debt that goes into collections. Virginia residents may be interested in learning about some factors that contribute to this and what millennials can do to cover their medical debt.
Virginia consumers who are considering bankruptcy might wonder whether they should file for Chapter 7 or Chapter 13. Chapter 7 involves discharging all eligible debts while Chapter 13 involves creating a payment plan that allows the filer to keep some assets. In order to qualify for Chapter 7, it is necessary to pass a means test.
Most Americans are unprepared to pay off medical debt, but there are steps people in Virginia can take to better insulate themselves against these types of costs. The first step is to build an emergency fund. This should be three months of expenses or at least the equivalent of the deductible for the person's health insurance. A health savings account can help with this.
Virginia residents who owe money to credit card companies, hospitals or other creditors may have their debts sold to collection agencies. Those agencies may then attempt to contact a debtor by mail or phone. While it is legal to apply pressure to debtors, they are not allowed to threaten or harass them. For instance, a debt collector cannot threaten to file a lawsuit unless there are legitimate plans to take a matter to court.
When looking at the statistics, it seems that Virginia residents have more money to spend on purchases and savings. Since the year 2009, the median household income has gone up by 30%. While this rise in income has its benefits, medical costs are actually growing faster than income. They have gone up by 33%. Americans may wonder how they can avoid putting medical costs on their credit card since interest rates can be so high.
Virginia residents who are struggling to pay their bills and face daily harassment from collection agencies are sometimes reluctant to pursue debt relief because they are worried about the impact that filing a bankruptcy would have on their credit scores. While Chapter 13 bankruptcies remain on credit reports for seven years and Chapter 7 bankruptcies can be seen by lenders for 10 years, the fears over what effect this has on an individual's ability to borrow are largely based on myth.
Many Virginia consumers find it difficult to make ends meet. They may turn to credit cards or loans to cover their expenses when they are unable to. Unfortunately, it can be difficult for people to find their way out of debt, especially if they are struggling with job loss or poorly paid work. Calls from debt collectors can lead to a miserable time, as people try to avoid their ongoing calls and demands for money. In 2017, over 70 million people across the country dealt with a debt collector, and one-third of all U.S. adults with credit had experienced a collection contact at some point.
Many Virginia consumers struggle to make ends meet. They may rely on credit cards to cover expenses, and the result is a growing amount of debt. At the end of 2018, people across the country owed around $900 billion in credit card debt. This marks an upswing from 10 years before, when Americans owed $792 billion to credit card companies. According to the Consumer Financial Protection Bureau, people owe major cards like Visa, Mastercard and American Express $793 billion, while they owe $91 billion to retailers with their own credit cards.
A recent survey reveals that revolving debt in Virginia grew by more than $1 billion during the second quarter of 2019 and has now reached a worrying $31 billion. The average Virginia household owes $10,480 to credit card companies, which is a figure that is only surpassed in Alaska and Hawaii. The personal finance website WalletHub based the survey on data provided by TransUnion and the U.S. Federal Reserve.