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Jackson Mississippi Bankruptcy Law Blog

When medical debt leads to creditor harassment

Many Mississippi residents cringe at the thought of overdue medical bills. After all, along with student loan debt, it is the leading cause of debt in the country. As the struggle to pay medical bills lingers on, many have turned to a variety of solutions. Some Americans, however, discover that they did not owe medical debt in the first place. When this is the situation at hand, a number of problems can ensue.

As The New York Times discussed last year, two thirds of those who made complaints to federal regulators about medical debt claimed they did not owe the money to begin with. Others argued they had already addressed financial issues through bankruptcy. Using a study from the U.S. PIRG and the Frontier group, The Times explains that debt collectors sometimes make mistakes, going after the wrong people. How does such a mistake occur? Some experts point toward a complex healthcare system; as a result, consumers can develop confusion over insurance plans and other details. Another contributing factor to the complaints involved harassment from creditors, and although such abusive behavior is banned by the Fair Debt Collection Practices Act, it nevertheless occurs. 

Handling the foreclosure process

No matter how one looks at it, foreclosure can be one of the most frightening experiences a Mississippi resident can face. Home is a place of security, not uncertainty. It is for this reason that many homeowners attempt to avoid the process altogether. While this is not always possible, there are a number of strategies residents can keep in their back pockets to best deal with this stressful process.

In some cases, it is possible to avoid this tricky financial predicament. As HGTV points out, some banks are more empathetic than others when it comes to foreclosure. Known as a "workout," some homeowners opt for a negotiation with the lender, in which the terms of the loan may undergo modifications for a smoother mortgage payment process. This option can involve many different steps. For example, a mortgage lender may agree to grant a temporary forebearance or extend the timeframe of the loan term. Other possibilities include modifying the interest rate of the loan and selling the home for less than is owed on its mortgage. 

Similarity in current debt trends to a decade ago

Mississippi residents who might be finding it hard to make ends meet financially every month can sometimes feel very alone, especially when so many reports are heard or read about how strong the economy is in the United States these days. It is important for people first to focus on their own situations, not those of others, but also to look behind the headlines and learn more of the facts. Some actually have pointed out that what looks like a bustling economy may not actually be so down the road.

In the last 10 years, the amount of debt held by consumers has increased from $2.6 trillion to $3.82 trillion. In the third quarter of last year, roughly 70,000 home foreclosures were initiated and a jump in the number of people who were behind on payments to banks for credit card debt or for vehicle loan payments also rose. The rise in delinquencies among auto loan holders is said to have been happening steadily for several years while the credit card debt delinquency was witnessed over the prior year.

The outlook on medical debt in america

America is no stranger to medical debt. This fact has become all the more apparent as countless citizen across the nation continue to grapple with surmounting bills they cannot pay. Mississippi remains one of the states that has struggled with medical debt the most. What can residents learn about current policies, and how might Americans finally tackle this prevalent issue? 

Stat News is quick to point out in an article on medical debt that this financial stress is one of the driving reasons for consumer debt in the country. After all, roughly 20 percent of Americans live with at least one medical debt collection item that has collected dust on a credit report. While the Affordable Care Act came to the rescue for many, Stat reports that Trump's recent efforts to dismantle the ACA has ultimately led to an increasing number of Americans who struggle with medical bills. The fact that the U.S. is the costliest country in the world when it comes to medical expenses is no secret, either; as a result, the National Consumer Law Center has proposed reforms at the state level to address the ongoing issue.

Millennials, money and bankruptcy

As more and more millennials in Mississippi enter the workforce, move out of their parents' homes and even start their own families, they are doing so with a very unique view of money and reality surrounding debt than did the generations before them. This group of people has come of age during the Great Recession and may still be struggling to figure out how to avoid serious personal financial troubles themselves.

According to data from Yellowbrick reported by CheatSheet, more than one-third of people under the age of 40 find themselves saddled with an average of $40,000 worth of debt in the form of student loans. Knowing that this age group also has an average salary of less than $35,000 per year, one must wonder how they can effectively make ends meet and stay on top of their bills.

Dispelling the top 5 bankruptcy myths

At the Pond Law Firm in Mississippi, we understand the difficulties you face when your earnings are insufficient to cover your bills. We also understand that you nevertheless hesitate to file bankruptcy for a variety of reasons that may or may not be valid.

As reported by Time, bankruptcy myths abound. Here are the top five.

Medical debt and credit reports

Regardless of whether or not a person in Mississippi has health insurance, there is almost always the likelihood that they will be left with out-of-pocket costs. Sometimes those costs may be relatively minor such as a co-pay for a standard office visit. However, these expenses not covered by insurance can add up quickly when an illness or emergency occurs.

When people struggle with the ability to keep up on these payments, their credit may be impacted. Similarly there may be times when a health insurance company is slow to make their portion of a payment and this may also wreck havoc on a consumer's credit report. According to Experian, there was more than $120 billion of medical debt in collections as of last June. A 2014 study conducted by the Consumer Financial Protection Bureau revealted that 52 percent of all debt on consumer credit reports was related to medical expenses.

Why bankruptcy can be better than ongoing garnishments

As debt mounts, you know there is no way you are going to pay it all off on your own. It's just too much. You do have a job, and you are thankful for that, but it is not as if you're making $100,000 per year. You and your family are living paycheck to paycheck.

In response, your creditors ask to have your wages garnished. They win the right to do so, and money starts disappearing from your paychecks. There may seem to be nothing you can do, as your employer legally must take the money out before giving you the check.

Medical debt in mississippi

One of today's biggest issues revolves around Americans and crippling amounts of medical debt. Not just a problem for a small percentage of the population, medical debt now affects millions. Mississippi is no exception to this struggle, as the state has become home to the highest medical debt in the country. Will this unsettling statistic change in the near future? What can consumers going through these tough times expect? 

PBS News Hour spent time focusing on this major problem, pointing out that almost 40 percent of adults in Mississippi aged 65 and younger struggle with medical debt. Furthermore, PBS shows that it is the middle class who suffers from this issue the most. This type of debt is the biggest reason consumers file for bankruptcy. Some experts claim that the fault lies in exorbitant insurance plans mixed with a lack of savings. By the same token, hospitals suffer, as well: when patients cannot pay the bills, the hospitals must manage. PBS brings to attention the wide range of possible solutions to this economic problem -- such as the expansion of Medicaid and the creation of more jobs -- however, a single solution has yet to surface.