Medical Debt Relief with Bankruptcy
It is not uncommon for people to experience financial ruin because of a chronic medical problem or temporary illness. A temporary or chronic illness can leave you or a loved one burdened with doctor bills, medical bills, hospital charges, or other type of medical debt. When you or someone you love gets sick, you will do anything to get the best treatment for you or your loved one.
However, doing this can cause financial instability if do not have adequate health insurance, or have no health insurance, or cannot afford the health insurance available. There is also the fact that health care costs are extremely high in most instances and are quickly getting out of control. That means health insurance costs will continue rising.
Just like you can never plan to get ill suddenly, you can never predict an accident. Accidents happen every day to both insured and underinsured people. This usually means mountains of debt that could take years to repay.
But the accident or illness does not just put you in debt but may also stop you from making a living. You may have to miss work to recover from surgeries or other medical treatments. As a result, you may not get paid as much as you earned before the accident, making you fall behind on other payments. It could put you at risk for home foreclosure, repossessions, creditor harassments and even lawsuits.
But filing for bankruptcy can help eliminate thousands of dollars worth of medical bills and provide much needed relief. An experienced lawyer may be able to help you completely wipe out your medical bills.
Filing a Chapter 7
A Chapter 7 Bankruptcy can wipe out your medical bills completely but you need to pass the ‘means test’. Your income must be low enough to pass the means test. If you pass the means test and then file a Chapter 7, you can wipe out doctor bills, medical bills, dental bills, medical collections, and almost any other medical debt.
You can do this because medical bills are unsecured debts that can be treated in bankruptcy like credit card debt. Any medical bill that you paid using your credit card will also be discharged with the rest.
Chapter 7 – More Info
Filing a Chapter 13
If the Bankruptcy means test dictates that you aren’t eligible for a Chapter 7 bankruptcy, then you can choose a Chapter 13 bankruptcy. A Chapter 13 does not eliminate all your debts. It is actually a court supervised repayment plan. This plan allows you to keep your most valued property while repaying your debts over a certain period of time.
Chapter 13 – More Info
A chapter 13 bankruptcy allows you to significantly reduce your medical bills by repaying them over a 3 to 5 year period. The payments you make are based on your disposable income, expenses and nonexempt assets. Often a Chapter 13 bankruptcy has forced unsecured creditors like medical debts, hospital bills, and doctor’s bills to accept pennies on the dollar.
Do not wait to lose everything before you get financial help. Under bankruptcy, you get a chance to begin afresh.