If you are facing piles of debt and it just seems like you will never be able to escape, bankruptcy might be the way to go. The process has a bad reputation, but bankruptcy has actually enabled many people to rebuild their financial lives. This includes many people who had high medical bills that they can never see themselves being able to pay for. If this situation sounds familiar, New City bankruptcy attorney can help you figure out if filing for bankruptcy is a good option for you.
Are Medical Bills Considered Unsecured Debts?
The good thing about medical bills is that they are considered “unsecured debts.” That means that they are not backed up by collateral or property, which means that they can be wiped out in bankruptcy.
The American healthcare system can be tough to deal with sometimes, especially if you get sick or injured without insurance. If your high medical bills are just a result of bad timing and bad luck, getting them discharged and having the chance to rebuild your finances could be life-changing.
What Kinds of Bankruptcy Can Clear My Medical Bills?
Now you may have heard of different “chapters” of bankruptcy. The two that are most relevant to people who want to file for bankruptcy due to medical bills are Chapter 7 and Chapter 13. Both chapters can help you discharge medical bills, but they work in slightly different ways.
In Chapter 7, your assets get liquidated and used to pay off creditors, including doctors or hospitals who want you to pay your medical bills. You will not lose everything you own though. There are exemptions that allow you to keep certain important assets, like your home, so that you will not be left with nothing once creditors are paid and you get a blank financial slate.
If you make too much money, you might not actually be eligible for Chapter 7 bankruptcy. You can discharge medical debts through Chapter 13 bankruptcy though. You will pay off your debts for three to five years with a payment plan that is approved by your creditors. Once you have made all of your necessary payments, you can start anew with no medical debt to worry about.
Is Bankruptcy the Right Choice for Me?
For those who are really struggling financially due to large medical debts, bankruptcy can be the chance to make a new start. It does take some time to raise your credit score and rebuild your credit history again, but this could be worthwhile if the alternative is drowning in debt for years and years. After a few years of diligent money management, your bankruptcy may not even be a factor when you are applying for loans, rental properties, or anything else.
Contact Our Law Firm Today
If you are buried by medical bills and other debts, contact The Lauterbach Law Firm. We can schedule a consultation and talk about your options. We know that this can be a stressful situation, but we are confident that we can help you find a solution and the right path forward.