Guiding You Toward A Brighter Financial Future

Why might a dream vacation lead to bankruptcy?

On Behalf of | May 13, 2024 | Bankruptcy

The perfect vacation is different for every person. Some individuals want to spend a week at a quiet beach somewhere. Others dream of an all-inclusive resort with wild nights and plenty of drinks. Vacations often involve traveling a long distance from home, which can put someone in a vulnerable position.

Whether someone wants to ride roller coasters at popular theme parks in other states or travel abroad, they may save aggressively for their dream vacation. Taking a trip can be an enjoyable and relaxing experience, but it can also be a source of personal risk.

Things can go wrong on vacation that trigger extreme financial hardship. Someone might get hurt in a car crash or it could fall ill while thousands of miles from home. Injury or illness while on vacation might potentially put someone at risk of personal bankruptcy. Even someone with health insurance could return from their trips with an insurmountable level of medical debt.

Insurance can’t help everyone in every place

Although health insurance can cover some medical expenses, it often only protects people when they are close to home. The unfortunate truth about travel is that it takes someone out of network for their medical insurance. Typically, health insurance policies apply to a specific region. Insurance companies negotiate prices with local healthcare providers. Those that sign contracts agreeing to certain terms become in-network providers. The best insurance coverage is only available when people see in-network physicians or visit local hospitals.

A trip to the emergency room in another state or a surgery in another country might not be eligible for any insurance coverage at all. Even if insurance covers a portion of someone’s costs, the available coverage can be far less than what someone expects. The massive medical debts generated by out-of-network treatments can add up to more than someone’s salary in some cases.

Medical creditors are notorious for being aggressive about collection efforts. Therefore, those dealing with large uncovered medical bills from a recent vacation may have to consider the possibility of filing for bankruptcy. The discharge available through a successful bankruptcy filing could help eliminate medical debts. Understanding how seemingly innocent choices can lead to major financial hardship could help people feel less conflicted about the decision to file for bankruptcy.