As reported in this blog, the U.S. Department of Education has issued new guidelines to lenders regarding when a discharge of student loans should not be contested in a debtor's bankruptcy. The new rules open up some avenues that did not exist in recent years, both nationwide and here in Arkansas. Additionally, bankruptcy judges are granting more undue hardship discharges in cases that may not have been considered undue hardship until recently.
Some Arkansas consumers may not be aware of the basic consumer protections to which they are entitled. After an extensive study by the Consumer Financial Protection Bureau, a federal crackdown was launched that revealed several dubious procedures by medical debt collectors. A settlement was subsequently reached with Syndicated Office Systems, one of the biggest debt collection agencies in the country. As a result of its illegal practices, the company will now pay 23,000 consumers a total amount of $5.4 million.
Even with medical insurance, many Americans nevertheless still struggle with medical bills. Medical debt sours the credit record and lowers the score, both in Arkansas and nationwide. Most people live on a very tight budget that cannot handle a substantial extra bill that was not budgeted.
One of the great contributors to a person falling into serious debt is the cost associated with medical care. It is very expensive nowadays to receive medical care, even if you have insurance. To that point, 78 percent of people who file for bankruptcy as a result of medical debt also have health insurance. Just because you are insured doesn't mean your medical care won't cost a hefty sum.
Lets say that, for years and years, you are perfectly healthy. You work hard and play hard, but you also make sure that your health doesn't suffer as a result. One day, you get a sudden pain in your stomach that pops up every once and awhile. Then it starts becoming more frequent, followed by the pain increasing to the point where you know you can't put off a doctor's visit much longer.