Medical debt is one of the leading causes for bankruptcy right after loss of income. It is a debt that all too often accumulates due to a major emergency injury or a unexpected catastrophic illness. With the rising costs of medical care, inadequate health insurance, and insufficient personal income, it is no shock that individuals and families rack up this burden.
Bankruptcy is a right in our U.S. legal system to help you get back on your feet financially. Personal bankruptcy can be the best way to legally and responsibly discharge your medical bills.
Bankruptcy can provide much-needed financial relief for those struggling with medical debt. Knowing how bankruptcy releases you from personal liability for this type of debt can bring you solutions you were unaware of.
What is Medical Bankruptcy?
Medical bankruptcy is an informal term for a bankruptcy filed to discharge medical debt. It is not actually a separate form of bankruptcy. When you decide you cannot meet your accumulated medical expenses, you would choose either a Chapter 7 or Chapter 13 bankruptcy. You must identify and provide a list of all your debts, including personal loans, housing loans, credit cards as well as all medical bills. You can not choose not to include certain debts.
Can You Discharge Medical Debt in Bankruptcy?
Medical debt can definitely be discharged in bankruptcy, though the type of bankruptcy you file and the type of debt itself will determine how this happens. It is typically an unsecured debt, meaning it does not have a specific asset tied to it like a car loan or mortgage would. This makes it easier to discharge than other types of debt.
What Happens with Chapter 7 Bankruptcy?
When filing for chapter 7 bankruptcy, medical bills can be included in the debt that is discharged. This process allows individuals to clear those debts along with other outstanding bills. Once a person has filed for chapter 7 bankruptcy and it is approved, you can begin getting your finances back on track.
What Happens with Chapter 13 Bankruptcy?
In chapter 13 bankruptcy, medical debt is treated like any other unsecured debt. This means that it can be included in a repayment plan and then wiped out at the end of the plan. To file for chapter 13, you must meet certain requirements set by the bankruptcy court. Once it has been filed and approved you will work with your trustee to pay off any required debt over a period of time. After completing the repayment plan according to the court’s instructions, you will be well on your way to financial solvency again.
When is the Right Time to File for Bankruptcy?
Filing a “medical bankruptcy” is a big decision, so it’s important to think carefully about when is the right time. If you are struggling with anxiety and stress because doctors offices, hospital billing offices and debt collectors are calling, it may be time to consider filing for bankruptcy. If you or a family member are stricken with illness or injury, the last thing you need is the added concern of worrying about basic necessities or simple niceties.
Talk to a bankruptcy attorney now and make sure you know your options You are not alone and the sooner you are released from this debt, the better.
Find Out How to File for Bankruptcy -Schedule a Consultation With a St. Cloud Bankruptcy Lawyer
If you are struggling with unpaid medical bills and are worried about ever getting out from this mountain of debt, take time to schedule a call or consultation with Margaret Henehan or Bill Kain of the Kain + Henehan law firm. Serving St. Cloud, Egan, and the Twin Cities area, they are experienced, kind, and trusted professionals. Let them guide you through their process starting with a free 60 minute consultation. Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form. and approve