Can You File for Bankruptcy if you have a Huge Medical Bill?
Even people with excellent credit and responsible financial habits file for bankruptcy. Unforeseen life events like expensive divorces, the sudden loss of a job, and a long-term illness can cause problems with debt that only bankruptcy can solve.
One of the most difficult financial burdens to overcome is mounting medical bills. With rising healthcare costs and a growing number of Americans without sufficient health insurance coverage, countless people have found themselves swallowed by medical debts they cannot repay. With large debts like these, a person may feel helpless to ever get out of their situation. People with good credit may see their credit score dip, greatly affecting their financial health and future prospects. If payments are missed, they may even face wage garnishments or other forms of collective action.
Wadhwani & Shanfeld understand that times like these can be difficult and overwhelming. Fortunately, there are options for you. Because Congress has deemed certain debts more important than others, not all debts are treated the same way by bankruptcy. In the case of medical debts, which are considered secured, they are treated as nonpriority debts and can be discharged by bankruptcy.
If you have good credit but cannot pay off your medical bills, filing for Chapter 7 bankruptcy may be the best solution to help eliminate your debt and can result in the discharge of the entire amount you owe. Under Chapter 7 bankruptcy, there is no limit to the amount of medical debt that can be discharged.
If you do not qualify for bankruptcy under Chapter 7, you may be able to file for Chapter 13 bankruptcy, which will allow you to keep your assets but will require you to pay back a portion of your medical debt through a structured repayment plan. Any debt remaining after the repayment plan will then be discharged.
In either case, your bankruptcy filing will provide an automatic stay that will keep creditors from harassing you for payment while your case is in progress.
Of course, every situation is different. To learn which bankruptcy option will best meet your individual needs, contact a Southern California bankruptcy attorney from Wadhwani & Shanfeld. Our Board-Certified bankruptcy specialists can guide you through the process and ensure that your filing is completed as efficiently as possible. To schedule a free consultation, please contact our firm at (800) 996-9932.