Have you been wondering if you can eliminate medical bills by filing for bankruptcy? It may help to know that you are not alone, by any means. Medical bills can be crippling for many people, and as a result of illness or injury, a family can truly suffer. Loss of income can be a result of dealing with medical issues, and the resulting expenses can add further debt and strife.
For those dealing with such circumstances, discussing your situation with a New Jersey bankruptcy lawyer can be a serious option if you need to find solutions to your debt. If you are facing any of the following, consider calling Stuart M. Nachbar at 973-567-0954 to schedule a consultation:
- Your credit score has been negatively impacted by your inability to pay your debts
- Your spouse has accrued debt as a result of medical expenses you both cannot afford
- You or your spouse has suffered from the loss of income as a result of illness or injury
If your medical-related debt is so large that it has become unmanageable and unaffordable, a bankruptcy lawyer can help. It would probably be some relief to know that medical debt is one of the most common reasons people file for bankruptcy. So many circumstances can play into this decision, however, bankruptcy is a viable option for anyone who has debt they cannot afford and is seeking relief.
Medical debt is treated like credit card debt in bankruptcies, and it can be wiped clear with bankruptcy. Both Chapter 7 bankruptcy and Chapter 13 bankruptcy can be used to eliminate medical bills, however, because both methods are inherently different, so it’s important to know that Chapter 7 is the type of bankruptcy most commonly used in situations as this. Chapter 13 is a more complicated method of filing for bankruptcy, and less commonly used in this situation.
If your financial situation is to qualify for Chapter 7, all of your medical bills and medical debt will be erased, as well as all of your other unsecured debt, such as credit cards. If you have paid your medical bills with a credit card, this will be equated in as well and will qualify for dismissal like any other credit card debt. The amount of medical debt you have is not limited, so even if you have many thousands of dollars in debt, it will probably still qualify for Chapter 7 bankruptcy. However, in order to be able to qualify for Chapter 7 bankruptcy, it will be necessary to have a very low resulting level of disposable income after completing the means test.
Medical Debt & Chapter 13
Chapter 13 is a more complex way to file for bankruptcy, and when it comes to medical bills and other debts combined, there are limitations. If you are to file for bankruptcy under Chapter 13, all of your medical bills will be equated into all of your general unsecured debt, and this will be factored into a repayment plan. How much you will have to pay is based on your lump sum of unsecured debt, and this will be determined by your income, your expenses, and your nonexempt assets.
Mounting medical debt is difficult to deal with, and not being able to afford it is a situation no one wants to enter. If bankruptcy is your only way out, understand that help is available. Contact the Law Office of Stuart J. Nachbar today to learn more about the options of bankruptcy that may be available for you.