If you’ve had a serious illness or injury requiring extensive treatment, bills can quickly add up. In addition, you may be unable to work during the course of your recovery, which can compound your financial woes. If you cannot make the minimum payments on your medical bills and they continue to accumulate, you might consider filing for bankruptcy.
Both Chapter 7 and Chapter 13 bankruptcies offer solutions for people who are overwhelmed with unmanageable medical bills. Chapter 7 can wipe out medical debt and other debts. Chapter 13 lets you repay debts over an extended period of time. The type of bankruptcy that will best serve your needs depends on your personal financial circumstances.
Chapter 7 offers these advantages:
- Your medical debt can be eliminated entirely.
- There is no limit as to how much debt can be discharged.
- There is no repayment plan or requirement to pay back any of the debts.
However, to be eligible for Chapter 7, you must pass the “means test,” which determines whether you are truly unable to pay off at least some of your debt.
If your income is too high to pass the means test, Chapter 13 may be the right option for you. Also known as a “wage earner’s plan,” a Chapter 13 bankruptcy offers these advantages when you’re seeking medical debt relief:
- You can keep most of your property and assets.
- You can reorganize your unsecured debts, including medical bills, and pay off a portion of them over a three- to five-year period.
- Once you have completed your repayment plan, the court will discharge any of the remaining debt.
Declaring bankruptcy to obtain medical debt relief is a big decision that requires forethought. You might first consider whether you can negotiate with your medical providers for reduced rates or modified payment schedules. You may also explore ways to refinance your medical debt. If you have exhausted your alternatives, bankruptcy may be your best course of action.
Getting your medical debt discharged in bankruptcy can help alleviate the substantial financial burden you may be facing. Jeff Field & Associates assists clients with filing Chapter 7 and 13 bankruptcies throughout the Atlanta metropolitan area. We have offices in Athens, Douglasville, Gainesville, Lawrenceville, Marietta and Scottdale. To schedule an appointment, call 404-381-1278 or contact us online.