Can Bankruptcy Help You Erase Medical Debt?

Can Bankruptcy Help You Erase Medical Debt?

According to a recent report by the Peterson-KFF Health System Tracker Organization, more than more than 6% of American adults have at least one outstanding medical bill that is greater than $1,000. Additionally, the report noted that most Americans who have medical debt disclose that it has caused significant financial difficulty. Understandably, many individuals wish that the difficulty would just go away.

Well, if you cannot afford to pay your medical bills and have been struggling to make payments for a while, filing for bankruptcy may be your best option. In fact, Chapter 7 or Chapter 13 of the US Bankruptcy Code can discharge most types of debt, including medical bills. There are some important things to keep in mind, though, before deciding to file for bankruptcy.

Using Chapter 7 Bankruptcy to Eliminate Medical Debt

Chapter 7 bankruptcy is a legal process that can be used to eliminate medical debt. This type of bankruptcy allows you to discharge most of your debts, including medical bills. To qualify for Chapter 7 bankruptcy, you must meet certain eligibility requirements, such as having a low income and limited assets.
Using Chapter 13 Bankruptcy to Eliminate Medical Debt

Chapter 13 bankruptcy cannot be used to fully eliminate medical debt. However, filing for Chapter 13 will get you a repayment plan approved by the court. This plan will give you a longer period of much-needed time to pay back your medical debt. The repayment plan will be based on an individual’s income and expenses. This can be a helpful tool for individuals who are struggling to pay back their medical bills.

Be Prepared to Answer Some Tough Questions From the Court

When you file for bankruptcy, the court will ask a lot of questions. One of the most important is to determine whether or not you qualify for Chapter 7 bankruptcy. This is determined by something called the means test. The means test looks at your income and expenses to see if you can afford to repay your debts. If you do not pass the means test, you may have to file for Chapter 13 bankruptcy.

If you do pass the means test, the court will still ask about your finances. This is to make sure that you are not trying to use bankruptcy as a way to avoid paying your debts. The court may also ask about your assets and any special circumstances that may impact your case.

It is important to be prepared for these questions and have accurate answers ready. An experienced bankruptcy attorney can help guide you through the process and answer any questions the court may have.

Contact Our Law Firm

There are two types of bankruptcy that can help you deal with medical bills — Chapter 7 and Chapter 13. Chapter 7 bankruptcy can help you eliminate all of your unsecured debts, including medical bills. Chapter 13 bankruptcy can help you reorganize your debts and create a repayment plan that fits your budget.

If you are considering bankruptcy, it is important to speak with an attorney at Adam Law Group. Our skilled attorneys can help you determine which type of bankruptcy is right for you and get you started on the path to clearing your medical debt.