Loss of income is the most common reason for filing for bankruptcy, according to a study that found it was cited by nearly 78% of respondents. This shouldn't be surprising, since most of us rely on income from a job to pay our bills. Over the past 25 years, personal bankruptcy filing rates have increased dramatically. An unexpected impact on revenues is the predominant cause of bankruptcy filing.
However, over the past 100 years, economic, legal and institutional factors (increased consumer debt, reduced savings, reduced costs of filing bankruptcy, and greater access to credit) are likely to have contributed to the pattern of bankruptcy rates. Medical bills are reportedly the number one cause in the US. A study has stated that 62.1% of bankruptcies were due to medical problems. Another states that more than two million people are adversely affected by their medical expenses.
It's hard to know what the real impact of medical expenses is with so many different interpretations of the study results. What is known is that there are many people who are so affected by health care debts that they need to file for bankruptcy. Estimates have been different in the past due to the timing of the studies that were conducted, the different methods, the way in which the results were interpreted, and the reasons why the results were used. Turning is a concept that consists of using information in a way that benefits the presenter or the parties associated with the presenter. The information presented in studies such as those mentioned above can be manipulated in such a way that the information, although not good, seems much worse.
Researchers disagree on evidence that medical bills cause bankruptcies. The biggest problem in answering this question is that those who file for bankruptcy are not required to state the reason. As a result, the estimates are based on surveys. Therefore, the answer will depend on how researchers formulate their questions and how the respondents define the cause of their bankruptcy. A variety of factors cause bankruptcies.
Many people with medical debts also have other debts. They may also have lower incomes, few savings, or have lost a job. Medical debts are generally unexpected: Many Americans live paycheck to paycheck because of the cost of living, low salaries, or living beyond their means. A sudden medical bill wreaks havoc on the financial lives of struggling people. Nearly a third of those surveyed by the KFF stated that they did not know that a particular hospital or service was not part of their plan.
One in four found that their insurance had denied their claims. There are a lot of reasons why people file for bankruptcy. Medical expenses do have an effect on people's financial situation, causing some financially responsible individuals to file for bankruptcy. For others, spending is the last push to overcome the financial cliff they were going through. The debate about medical expenses and bankruptcy will continue to occupy a place on political platforms, around dinner tables and in academic circles in the near future. Politicians will continue to roll out numbers to get votes they need.
However, what is undeniable is that a large number of people are influenced by medical expenses to file for bankruptcy in the United States. Medical debt will remain on your credit report as long as it's correct and the account is open. Once the account is closed, you can expect negative information to disappear from your credit report within seven years. If you file for bankruptcy, that can stay on your credit report for 10 years. NerdWallet Health finds that medical bankruptcies account for most personal bankruptcies.
Not only is divorce traumatic on a personal level, but it can also lead to financial problems when a household is divided and expenses increase dramatically while incomes are divided. If either party or both people can't pay their debts, it can be very difficult to control expenses that arise from splitting two people's income. Our Chicago bankruptcy lawyer can determine if filing an application is right for you. The law was passed in response to an increase in personal bankruptcies during the 1960s and many provisions made it easier for both businesses and individuals to file for bankruptcy. These factors such as increased availability of credit, reduced costs of filing for bankruptcy and decreased consumer savings are not necessarily causes of most bankruptcies but have made people more susceptible to negative income crises increasing their chances of filing for bankruptcy. The majority of this number came from non-commercial bankruptcies with 59,058 cases while there were only 2,682 commercial bankruptcies. The increase in personal bankruptcies during 1920s and 1930s together with increasing corruption and legal challenges related to business bankruptcy filings during Great Depression prompted passage of Chandler Act in 1938. A study conducted by Harvard University has shown without doubt most significant all bankruptcy statistics United States nearly two-thirds all bankruptcies due medical expenses. Despite increase bankruptcies up point law actually encouraged bankruptcy increasing federal exemptions personal property.
