Bankruptcies
A major study proves that illness and medical bills are at the top reasons for bankruptcies
Unemployment has reached record levels and retirement funds are disappearing fast for many people during this recession. Prices of homes have plummeted to record lows. Statistics according to the U.S administrative office indicated that, the number of U.S. bankruptcies filed during the first three months of 2009 increased 34.5 percent over the same period in 2008. In addition, what’s surprising is that study done by Harvard which was published in august 2009 which reveals financial troubles began hitting Americans even before the recession was officially recognized. It was also found that the top causes of bankruptcies were medical bills and illness related problems.
The investigators looked at random people about 2,314 bankruptcy filers in 2007, they investigated their court records and then interviewed 1,032 of these financially troubled folks. Thus relying on these same definitions both 2001 and 2007, the researchers reach a consensus that these bankruptcies were caused by medical problems which had soared by almost 50 percent during those current years. In fact, the chances a bankruptcy filed related to medical cause were 2.38 higher in 2007 than in 2001.
And innumerable families who had medical insurance were under-insured, leaving them accountable for thousands of dollars in medical payments they couldn’t afford to pay. In fact, out-of-pocket medical charges averaged under $18,000 for those who acquired private insurance and got bankrupt due to medical costs. Uninsured patients dealt with $26,971 in out-of-pocket expenses.
The study’s authors suggest that almost all insurance is related to employment, so a health related illness can prompt both losses of a job and of health insurance coverage. Of course, losing a job due to the downfall of an economy also typically means losing health insurance coverage.
Regrettably, according to another study, Americans are not living healthy regardless of the fact that it can save their money and life. What’s more, the research reveals that there’s in fact a decline in healthy living, particularly amongst people in their middle age.
Investigators compared the results of two large studies of Americans conducted between the years of 1988 and 1994 and between 2001 and 2006. The research concluded that during the intervening years, there was a considerable increase in the percentage of adults between the ages of forty and seventy four who reduced their physical exercise level and also added additional weight. The research subjects were in taking far more alcohol and eating fewer fruits and vegetables, as well, as the years rolled by.
Using A Home Equity Loan To Get Out Of Bankruptcies
When looking at alternatives when one is faced with bankruptcy, You’ll come to see that, there are a variety of options available for you. Sometimes, bankruptcies are unavoidable, these days, especially with the recessions and economic downturns. However, things can be resolved quickly and efficiently once you have filed for bankruptcy.
Bankruptcy protection such as Chapter 13 bankruptcy is quite flexible, since it allows you to pay your outstanding debt over a period of three to five years depending on your case. In addition, on the plus side, if you have an equity on your home? Then the debt repayment process can be accelerated and fast tracked. Pay-off balance must be required for one to fully pay-off the outstanding debt amount. In such case, a home equity loan or perhaps refinancing your per-existing loan might be a better way to pay off your debt in a chapter 13 bankruptcy.
A home equity loan is a loan in which the person borrowing uses the equity on their home as collateral. This type of loan is very useful to help finance debts such as a chapter 13 bankruptcy. Home equity loans are protected loans. “The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to satisfy the debt by regaining the amount originally lent to the borrower.” bankruptcy is an unsecured liability in which there has been no asset being pledged as collateral against the loan. Using a home equity loan to pay off bankruptcy for all intents and purposes converts an unsecured debt to a secured debt.
Getting a new loan can come with the benefit of a longer debt repayment plan, in simple terms, you’ll be allowed more time to pay off your outstanding debt. Therefore, you are not limited to a time period of 3 to 5 years that comes with chapter 13 bankruptcy. You’re more likely to get a lower interest rate when you refinance a home equity loan.
Get in touch with your attorney and check to see what option might be available for you? Check to see if you can work out your remaining balance from you bankruptcy case. You may be able to file a motion in regards to incur debt, which may make it easier to get a new loan. However, all cases are different so each case is handled a little differently.