Medical bills are one of the primary causes of bankruptcy. Whether you’re dealing with a chronic illness and over time the cost has ballooned, or you experienced an unexpected health emergency, medical expenses can be astronomical and throw even the most conservative financial plan off track.
Many people dealing with financial challenges caused by health problems are forced to consider bankruptcy. The good news is it can be one of the best solutions for those drowning in medical debt.
Will you still be able to pay your usual living expenses after bankruptcy?
How will it affect my overall financial situation?
And what if I’m still receiving bills for medical care – can they be included?
Understanding how bankruptcy can help those dealing with medical debt will make your decision to file or not file much easier.
Before moving ahead with filing bankruptcy to deal with medical debt, it’s important to understand your options. One of the biggest decisions you’ll make when you decide to file is whether to file for Chapter 7 or Chapter 13 bankruptcy.
In Chapter 7, any assets you own will be liquidated and used to pay your bills. Any unsecured debts that cannot be paid are discharged by the bankruptcy court. This includes medical debt.
Essentially, your obligation to pay existing medical debts is erased in Chapter 7 bankruptcy.
Unfortunately, this does not include any upcoming debt, so if you’re still receiving care and additional bills are on the way, you will be responsible for these. Make sure you give your bankruptcy attorney a clear explanation of where you are in terms of care and bills from doctors so he or she can help you determine the best time to file.
The alternative to Chapter 7, Chapter 13 bankruptcy, might be a better option if you’re still in the midst of medical treatment, but it comes with its own downside. In Chapter 13, you’ll still bear some responsibility for your debt. Instead of discharging medical bills, they’ll be included in a repayment plan that gives you several years to pay.
Chapter 13 payment plans allow you to catch up on past due debts and organize your financial situation so it not as overwhelming. If needed, you can adjust your payment plan after it’s in progress, adding incoming medical debt, but it’s important to realize how this will affect your overall situation.
In some cases, additional debt even qualifies you to file for Chapter 7, in which case your medical debt would be discharged.
Keep in mind, there are restrictions on how many times you can file for bankruptcy within a certain period of time, so you’ll want to carefully consider your options and rely on the advice of a bankruptcy expert before moving forward with your decision.
For more information on filing for bankruptcy more than once, check out this information from nolo.com.
Figuring out whether bankruptcy is the best option when you’re dealing with medical debt can be a difficult decision. Even if you know bankruptcy is right for you, determining which type to use can be confusing. Working with an experienced attorney will ensure you make the right choice and really give yourself an opportunity to recover from your financial strife.
To learn more or to speak to someone about your situation and how to handle unpaid medical debts, contact R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA).
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