A recent study published by Bankrate found that only 40 percent of Americans have enough money saved to cover a $1000 emergency expense. It is a sobering fact that many Americans live paycheck to paycheck and their finances will would likely not survive any sort of unexpected emergency. These unexpected emergencies are usually medical in nature but can also include divorce or damage to the home.
It is no wonder, then, that a new study found well over half of all bankruptcies (66.5 percent) were tied to medical expenses. It is estimated that 530,000 Americans turn to bankruptcy each year because of medical issues and bills.
While it is true that people across the nation live on a budget, those budgets rarely account for saving or setting aside a contingency. Budgets are usually dominated by known bills and expected expenditures. From housing payments to utilities to groceries, Americans account for discretionary spending, but very few build an “emergency fund.”
Fortunately, there is help available
The Bankruptcy Code was developed to give hardworking Americans a chance at a fresh financial start. The most common tactics are to file either Chapter 7 or Chapter 13 depending on personal factors and the results of a means test. Seeking debt relief through bankruptcy can offer immediate benefits such as the end of creditor harassment (known as the “automatic stay”), the avoidance of wage garnishments, and a way to fight foreclosure and repossession.
With mounting credit card debt, increasing medical debt and loss of wages, it is wise that people examine their options for financial recovery through bankruptcy. And experienced attorney can provide honest answers and legal guidance.