I think that what you have is people already up to their eyeballs in debt and when they get hit with a medical bill for $12k, it sends them over the edge.
That said -- I'm pretty sure a lot of credit card debt is being racked up on necessities, including prescriptions, groceries, heating oil etc.
Saying that it's just medical bills is probably just as wrong as calling them irresponsible spendthrifts. On the other hand, I have no doubt that medical bills are a significant factor.
Yeah, that's my point. The medical bills "send them over the edge"--why?
At all levels, shouldn't people be structuring their finances so that can roll with the punches at least a little?
Reminds me of a story that was trumpeted during Katrina. People in a certain neighborhood were going around to the businesses asking for loans in the amount of $30 and $40 so they could gas up their cars and evacuate.
The "problem," according to the story, was that the guvmint checks didn't come in until the end of the month, so the people had no money to buy one tank of gas.
Hello, I don't care if you "make" $250 a month on welfare or whatever. Considering that true emergencies occur very infrequently, even if you put a dollar a month under your mattress, after a while you'd have at least enough to buy some gas to get yourself and your family 50 miles out of town ahead of a killer hurricane.
Same goes for people at other economic levels. The higher the level, the more the need to plan for a rainy day.
I can guarantee that some of the people who file bankruptcy over $12K in medical bills would have thought nothing of going out and incurring at least $12K in consumer credit debt and it not becoming a bankruptcy situation.
May be true, but there again one has to know more about the comprehensive financial situation. My credit card has every single thing in my life on it. Why? Because I get frequent flier miles and I pay the bill in full and avoid charges anyway! Plus, it's very convenient. And at the end of the month I have a nice, complete record of everything I spent and where. Just read on msn money that checks are getting even more last century (new rules on processing, etc.). My point is that even though "necessities" may be on credit cards, that doesn't mean that people are needing loans to pay for necessities. It could just be convenience or some other incentive.