As living expenses increase, many families find themselves struggling to pay debts that they could once easily afford. According to the Federal Reserve, nearly 40% of U.S. adults have no means to cover an unexpected emergency. 

As reported by ABC News, a 2018 survey revealed that 25% of adults did not receive the medical treatment they needed because they could not afford it. Out of those who did receive medical care, one out of five adults surveyed noted that unexpected health issues created the need for treatment. 

How the medical debt spiral may start 

If faced with a choice of paying regular monthly bills or covering a $400 emergency, many individuals would find it difficult to meet their current expenses. Because not all employers offer sick pay, unanticipated health issues requiring medical attention may also force individuals to miss work and lose income. 

An extended illness could force families to live off savings to make their mortgage or other payments. A family’s savings could then become depleted before an individual finally gets back to work. 

Financial advisers may suggest holding up credit card payments for a few months to help catch up on other expenses. Skipping credit card payments, however, typically results in a need to make a large balloon payment to cover the accumulated interest and late fees. A credit card company may also tack on additional fees when the principal balance goes over the account holder’s limit. 

After an expensive medical emergency, many individuals cannot afford to make a large enough payment to bring a credit card account out of arrears. This can trigger companies to begin aggressive collection efforts. 

Consumers’ legal right to stop harassment 

The high cost of medical care, recovery and out-of-pocket expenses, even when health insurance plans are available, often sets families back financially. When creditors demand payment through overly aggressive and harassing collection tactics, however, an individual has the legal right to stop the phone calls, letters and distressing actions. Many families and individuals overburdened with medical debts also find relief by discharging medical debts through Chapter 7 bankruptcy.