Can you file for bankruptcy for medical debt?

Americans today owe an estimated $220 billion in medical bills. Medical debt can be crushing, increasing stress levels while affecting your ability to provide yourself or your family with necessities. If you’re facing unmanageable medical bills, filing bankruptcy can help you eliminate the burden and embrace financial freedom.

Bankruptcy for Medical Debts

Bankruptcy is a legal process that discharges or eliminates some or all of your debts for a financial fresh start. During the bankruptcy process, debtors request the court to discharge their debts, removing their legal obligations to pay them. As soon as you file bankruptcy, creditors must stop all debt collection efforts. That means the phone calls will stop, and you will no longer need to fear checking your mailbox. Bankruptcy can, in some cases, even stop creditors from repossessing your property and help you create a repayment plan that fits your budget. After the process, your debts will be gone, and you’ll be free to rebuild your credit.

Types of Bankruptcy Filings

The average debtor will typically qualify for one of two main types of bankruptcy> Chapter 7 and Chapter 13. Your bankruptcy attorney can help you determine which will best fit your circumstances and meet your needs.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy can eliminate most or all of your unsecured debts, including medical debt, and there is no cap on how much debt can be discharged. As soon as you file, creditors will cease collection efforts. To be eligible for a Chapter 7 bankruptcy, you must meet income eligibility limits, but you will be able to eliminate all your medical debt as well as other unsecured debts, including credit card debt, personal loans, utility bills, and more.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is another option for debtors facing significant medical debt. Chapter 13 is a type of bankruptcy that is available to those who do not meet the income limits for Chapter 7 bankruptcy. During the Chapter 13 bankruptcy process, your disposable income and debts will be considered as the court calculates an affordable repayment plan. Your creditors will be paid through the repayment plan, and as with Chapter 7 bankruptcy, filing Chapter 13 ends all collection efforts, bringing you some peace of mind.

Once your repayment plan has been fulfilled, your remaining medical debt and other eligible debts will be discharged, and you will be free to begin rebuilding your credit.

The Benefits of Bankruptcy

While it’s true that bankruptcy can negatively affect your credit score, many people struggling with insurmountable debt are already dealing with free-falling credit scores. In other words, bankruptcy can help you stop the free fall and get back on your feet again faster.

If your medical debt is more than you can manage without compromising your or your family’s future, bankruptcy can offer many benefits, including:

• An automatic stay, which stops creditor action, including phone calls, letters, repossessions, and other debt collection activities
• Discharged debt, which includes unsecured debts and fraudulent debts, and may allow you to settle some debts for less than you owe
• Exemptions, allowing you to protect your home, vehicle, and other essential personal property from creditor actions
• A financial fresh start that will enable you to rebuild your credit score and achieve financial stability

The Filing Process: What to Expect

Filing for bankruptcy can be a complex process requiring extensive paperwork, preparation, and legal knowledge. Even fairly simple, straightforward bankruptcies can bring unexpected challenges. A bankruptcy attorney will ensure your documents are filed correctly and promptly, guiding you through the process so you can embrace financial freedom.

Because bankruptcy claims can be dismissed over small errors, legal advice is critical. The filing fee just might be more affordable than you’d imagined. Waiting, on the other hand, could cost you far more than you’re willing to pay, increasing your stress, worry, and bills as well as the risk of repossession and foreclosure.

Medical Bankruptcy

If you’re facing exorbitant medical bills, we can help. We understand the process can be difficult and will work hard to simplify it. We help you navigate the complex and sometimes confusing world of bankruptcy, easing your burdens so that you can embrace your life.