Using Bankruptcy to Manage Medical Expenses
You may have your credit card debt under control, and you may keep up with your monthly car loan and mortgage payments. However, when medical expenses hit you when you least expect it, you may find yourself spiraling into a black hole of debt that you simply cannot climb out of. In order to manage your medical expenses, you may have to neglect some of your credit card payments or loan payments, and this can cause problems on your credit report and substantially lower your credit score.
While filing for bankruptcy itself may have a negative impact on your credit score, this negative impact is not long-lasting, as you will be able to get rid of your debt through the bankruptcy process, and start fresh after your debt is discharged. Further, if you realize that your medical expenses are going to prevent you from keeping up on your credit card and loan payments, you should consult with a debt management and bankruptcy attorney to address the various options you have for taking control of your debt and becoming debt-free.
While many healthcare providers will negotiate with patients to formulate a manageable monthly payment plan, you may find yourself paying off medical expenses for decades, and this could prevent you from using your hard-earned money to purchase a car or home, or anything else requiring a loan. Thus, bankruptcy may be the best option for you. However, it is important to understand that each person’s situation is different and requires an individualized financial plan for debt management that an experienced bankruptcy and debt-management attorney can help with.
Should I File for Chapter 7 or Chapter 13 Bankruptcy to Discharge My Medical Expense Debt?
If you simply cannot pay off your medical expenses without resorting to bankruptcy, you have the choice of either filing for Chapter 7 or Chapter 13 bankruptcy. Both methods will enable you to discharge your medical expenses and get back on track, so you can begin to rebuild your credit and start fresh.
Filing for Chapter 7 bankruptcy is a good option for individuals who do not have a substantial amount of income and have very few assets with much worth. Chapter 7 bankruptcy will allow you to completely wipe out the debt acquired from your unpaid medical expenses. You do not need to have bad credit or multiple creditors in order for file for Chapter 7 bankruptcy. You can certainly seek relief from Chapter 7 bankruptcy protection simply for having one, substantial medical expense that cannot be quickly discharged in any other way. However, it is important to understand that not everyone will qualify for Chapter 7 bankruptcy.
Filing for Chapter 13 bankruptcy is a good option for individuals who do not qualify for Chapter 7 bankruptcy. This often occurs when the individual filing for bankruptcy has a modest amount of income and has assets that might be lost in a Chapter 7 bankruptcy. By filing for Chapter 13 bankruptcy, you may be responsible for paying the debt off with a repayment plan, but a portion of the unpaid medical expenses might be discharged, so that you are not ultimately responsible for the entire unpaid amount.
Regardless of what method of bankruptcy you believe is the best option for you, it is a good idea to consult with an experienced bankruptcy and debt-management attorney who can provide you with the guidance you need to overcome your debt and learn how to live debt-free in the future.
Contact The Law Offices of Georgette Miller and Associates, P.C. Today
Medical expenses are usually unexpected and they can leave you in with an enormous amount of debt. Bankruptcy may be an option for you to consider after speaking with a Philadelphia debt-management and bankruptcy attorney. The attorneys of the Law Offices of Georgette Miller and Associates, P.C., have the skill and dedication to help you pay off your debt and learn to live debt-free in the future. Our law firm provides legal services to businesses and individuals located in and around Philadelphia, PA, New York, New Jersey, Washington, D.C., and Wilmington, DE. Contact our office today by calling (866) 96-GMLAW to schedule an initial consultation.